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    EUR/USD moves sideways around 1.0820 following a volatile session driven by PMI data

    FXStreet
    Updated Feb 23, 2024 05:27
    Mitrade

    ■  EUR/USD consolidates after witnessing volatility on Thursday.

    ■  The Euro remains stable as traders digested the mixed PMI figures from the Eurozone.

    ■  US Dollar gained ground after better-than-expected US Initial Jobless Claims.


    EUR/USD consolidates following a volatile session prompted by the release of European and US Purchasing Managers Index (PMI) data on Thursday. The Euro (EUR) stabilized as investors processed the mixed figures concerning private business activity in the European Union (EU). The pair gets buoyed around 1.0820 during the Asian trading hours on Friday.


    In the Eurozone, the disinflationary trend persists as both Eurozone and German PMI data for February reveal mixed figures. While preliminary Eurozone and German Services PMIs increased, Manufacturing PMIs fell short of market expectations.


    The ECB Monetary Policy Meeting Accounts for January indicated that policymakers maintain caution regarding easing monetary policy. They expressed a consensus that it was premature to discuss rate cuts at the present meeting.


    ECB policymakers acknowledged progress on inflation, showing greater optimism than in previous years. They also emphasized that rate cuts are not automatically justified, even if the ECB revises March inflation projections downward.


    The US Dollar Index (DXY) hovers near 103.90, supported by higher US yields, which stand at 4.71% and 4.33% for 2-year and 10-year US Treasury bonds, respectively, at the time of writing. Furthermore, the US Dollar (USD) received upward support on Thursday, driven by robust labor data from the United States (US).


    According to the US Bureau of Labor Statistics (BLS), weekly Initial Jobless Claims dropped below consensus expectations, with figures reaching 201K for the week ending on February 16, lower than the market expectation of 218K and the previous figure of 213K.


    In terms of PMI data, S&P Global US Services PMI posted a reading of 51.3 in February, slightly below the expected 52.0 and the prior figure of 52.5. However, Manufacturing PMI improved to 51.5, surpassing the anticipated 50.5 and the previous figure of 50.7.


    US Composite PMI declined to 51.4 in February from the previous reading of 52.0. Additionally, Hawkish remarks from US Federal Reserve officials, emphasizing the avoidance of interest rate cuts in the near term, could further bolster support for the US Dollar (USD).

    * The content presented above, whether from a third party or not, is considered as general advice only.  This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.

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