The US Dollar declines after disappointing economic data

Eurozone services sector continues to recover despite mixed data

Despite mixed data on the services sector in the Eurozone, the sector continues to recover at a steady pace. The composite purchasing managers' index, which is a good gauge of the economic situation, rose to its highest level in 10 months, from 52.0 to 53.7 points. This is the third consecutive month above the 50 level that separates growth from contraction.

The recent data contributed to optimism about the stability of the Eurozone economy despite the pressures it is facing. The recent increase in economic activity mainly reflected strong growth in the services sector, despite the pressures facing households due to inflation. This contrasts with the manufacturing purchasing managers' index, which was published on Monday and showed that activity in factories declined further last month as consumers, feeling the squeeze of rising living costs, cut back.

The EURUSD pair continued its rally and is now trading near 1.0940 levels.

European stocks struggle with declines

Despite positive economic data, European stocks experienced a decline during Wednesday's trading. The Euro Stoxx index dropped by 0.3%, while the German DAX and CAC40 indices fell by 0.4% and 0.3%, respectively. Investors are remaining cautious in light of the recent banking crisis. On Tuesday, the KBW bank index, which tracks 22 US banks, dropped by 2% after JPMorgan CEO Jamie Dimon warned that the crisis "is not over yet" and its effects will be felt for years to come.

New disappointing economic data Puts pressure on US Dollar

Disappointing economic data released in the US is putting pressure on the US dollar. The ADP private sector jobs index showed an increase of only 145,000 jobs, falling short of expectations for 208,000 jobs. As a result, the dollar index immediately declined by 0.30% to levels of 101.50, which supported major currencies and dollar-denominated commodities such as gold. Buying support continued to dominate trading in the yellow metal, which reached a new high in 2023 near the $2027 per ounce level.