Germany’s PMIs decline further
Germany’s flash services PMI drops to 47.6 vs estimates of 49.3.
The EUR/USD rose by 0.3% to 1.0890, but the euro struggled to capitalize on positive market sentiment due to Germany's deepening economic decline.
The GBP/USD rose by 0.3% on better-than-expected PMI data for the UK, with Flash Manufacturing PMI at 47.3 and Services PMI at 53.8.
The USD/JPY fell by 0.5% to 147.57 as the yen gained strength from rising Japanese government bond yields.
On the Market Watch!
The Euro and the pound
The EUR/USD pair saw a modest 0.3% increase, reaching 1.0890. Despite a favorable risk sentiment, the euro faced challenges in capitalizing on the positive market mood due to recent data revealing a deepening economic decline in Germany.
Both manufacturing and services activities in the country contracted, as indicated by the latest reports. Additionally, Germany's Ifo institute revised its economic growth forecast for 2024, lowering it to 0.7% from the previously estimated 0.9% in mid-December, underscoring the heightened concerns about the economic performance of the largest economy in Europe.
Meanwhile, the GBP/USD pair rose by 0.3% capitalizing on better-than-expected PMI’s. The UK’s Flash Manufacturing PMI scored a 47.3 vs an estimate of 46.7. Whilst the Services PMI scored 53.8 vs 53.1 previously.
The USD/JPY declined by 0.5% to 147.57 as the yen received a boost from the rise in Japanese government bond yields, reaching six-week highs. This surge followed comments from central bank chief Kazuo Ueda on Tuesday, indicating that the likelihood of achieving the Bank of Japan's inflation target was gradually improving.
The yellow metal
Gold prices saw a slight decline, maintaining a trading range that had been established over the previous week. As the market exhibited increased uncertainty regarding potential U.S. interest rate cuts for the year.
The yellow metal hovered close to $2031 as traders wait for GDP data set to be released tomorrow.