Euro’s Slide & Pound’s Punch in a Busy Data Day
Today’s headline: the euro kept climbing against the dollar, even while the pound dipped a touch against it. The currency markets had to juggle a basket of mixed PMI read‑outs and a looming ECB meeting—no wonder traders felt their heads spinning!
What’s Happening in the EU?
- Euro vs. Dollar (+0.38%) – the euro is still on a winning streak against the USD, keeping the squeeze alive.
- Euro vs. British Pound (–0.147%) – it hit its lowest spot against the pound since September, settling at 0.85359.
- ECB’s Tomorrow‑Evening Countdown – everyone’s eyes are on Christine Lagarde’s speech. Will she flatten the rates the same or tease a future cut? The suspense is palpable.
PMI Shake‑Up Across Europe and the UK
Let’s break down the numbers that made the markets snooze and then wake up:
France
- Services PMI: 45.0 (below the 46.1 expected). “Lowest drop since last September.”
- Manufacturing PMI: 43.2 – still a contraction but a smidge less fierce.
- Why? Weak demand, high financing costs, and a shiny inflation parade led by wages and energy.
Germany
- Services PMI: 47.6 – the lowest since August.
- Manufacturing PMI: 45.4 – contraction at its slimmest speed since last February.
- Spending scare: customers are being cautious, the economy feels uncertain, and global export hiccups bite.
EU‑Wide Snapshot
- Manufacturing PMI: 46.6 – a decent bounce, higher than the market predicted.
- Services PMI: 48.4 – a quicker dip, lowest since October.
- Good news: new orders hardly slowed, employment held steady, and optimism in the new year wasn’t all doom.
United Kingdom
- Services PMI: 53.8 – the fastest expansion since May.
- Manufacturing PMI: 47.3 – the slowest contraction since April.
- Positive vibes: higher demand and a more optimistic business outlook fuel consumer spending.
- Cost side: input costs hit an all‑time high since August; wages and shipping disruptions in the Red Sea added fire‑crackle.
Bond Market Buzz
- German Bund (10‑year) – cool off after peaking at 2.594% on Dec 5. It dipped to 2.538% today.
- UK Gilt (10‑year) – surged to 4.041% on Dec 12 after today’s upbeat data.
- US Treasuries: stuck high, but not as fierce as last week’s peak.
Bottom line? The euro stays snappy against the dollar, but the pound is watching the drama unfold. The markets are dancing to mixed techno beats of PMI data, inflation headwinds, and a big question mark on the ECB’s next move.
Quick Takeaway
Hold onto your hats, traders! The euro isn’t losing steam, yet other currencies are slipping as the UK looks a little brighter than its European counterparts. The next line in the ECB’s script will tell us whether rates stay put or slide a bit forward.
