The US stock and bond markets will be closed in observance of Thanksgiving Day, which might make it challenging for EUR/USD to find a clear direction leading up to the weekend.
EUR/USD Gains Amid Positive Eurozone Data
EUR/USD is maintaining a positive trajectory above the 1.0900 mark during Thursday’s European session. This trend is bolstered by encouraging PMI data from Germany and the Eurozone, indicating a reduction in the contraction of private sector activities. Anticipation for the ECB’s October meeting accounts release later today also contributes to this upward trend. Following a downward correction, the technical outlook suggests buyers are still engaged.
The USD strengthened in the middle of the week as the US Department of Labor announced a decline in weekly Initial Jobless Claims. However, a modest rebound in Wall Street’s main indices helped curb USD’s gains, providing support for EUR/USD.
German data released early Thursday showed a softening contraction in private sector business activity, with the HCOB Composite PMI climbing from 45.9 in October to 47.1 in early November. Similarly, the Eurozone’s HCOB Composite PMI rose to 47.1 from 46.5 in October.
GBP/USD Consolidation Post-Strong UK PMIs
GBP/USD retains its gains hovering near 1.2550, following a spike to 1.2573 triggered by robust preliminary business PMI data from the UK. The data indicated a return to expansion for the services sector in November. The broad weakness of the USD and an optimistic market sentiment are fueling this upward trend.
After a dip to 1.2450 in the American session, GBP/USD regained traction and stabilized above 1.2500 early Thursday, aided by an improving risk mood and upbeat UK PMI readings.
UK Autumn Statement and Tax Cuts
The UK’s autumn statement did not significantly impact the markets, as the budget proposal details were already known. Even though lower taxes and public spending could be favored by Tory voters, Commerzbank analysts argue that these tax plans might not be interpreted as a positive factor for GBP.
S&P Global/CIPS Composite PMI in the UK rose to 50.1 from 48.7 in October, pushing the Pound Sterling higher. This rise indicates a shift in private sector business activity from contraction to expansion. The Manufacturing PMI and Services PMI also increased to 46.7 and 50.5 respectively.
Market activity is expected to slow down in the day’s latter half due to reduced trading volumes on Thanksgiving Day in the US.
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