Oct 24, 2022
VOT Research Desk
In the early trading hours of the Asian session on Monday, the EUR/USD reached its highest level in two weeks at 0.9900 before reversing course and falling below the 0.9800 region.
The shared currency is under pressure due to the risk-averse market climate and the unimpressive PMI data, and a decline below 0.9800 might lead to more losses. Friday’s Wall Street Journal article stated that Fed policymakers will be debating whether to signal their readiness to pursue a more modest rate increase in December.
The dollar’s strength versus its competitors decreased as a result of this event, which resurrected expectations that the US central bank had achieved its hawkish high. Although the dollar had trouble finding buyers at the start of the week, the gloomy market environment helped it maintain its position.
US stock index futures were down between 0.6% and 0.7% as of the time of writing.
The industrial and service sectors of the private sector economic activity in early October continued to decrease at an accelerating rate, according to S&P Global PMI surveys from the eurozone and Germany.
According to Chris Williamson, Chief Business Economist at S&P Global Market Intelligence the eurozone economy looks set to contract in the fourth quarter given the steepening loss of output and deteriorating demand picture seen in October, adding to speculation that a recession is looking increasingly inevitable.
The S&P Global PMI statistics for the US will be examined for new inspiration in the second half of the day.
No matter how the PMI numbers turn out, EUR/USD is going to find it tough to stage a recovery if safe-haven flows rule the markets after Wall Street’s opening bell.
