EUR/USD Eases On Intraday Gains As US Dollar Bounces Back
EUR/USD gave up on intraday gains after hitting a one-month high near 1.0530 and dropped to near 1.0460 in the North American session on Monday (24/2). The major currency pair surrendered significant gains as the US Dollar (USD) bounced back, with investors looking beyond the weak S&P US Global PMI data for February.
The US Dollar Index (DXY), which tracks the greenback against a basket of six major currencies, rose to near 106.40 after hitting a fresh 11-week low around 106.10 the previous day.
The S&P US Global PMI report showed on Friday that overall private business activity expanded at a slower pace. The Composite PMI, which measures activity in the manufacturing and services sectors, fell to 50.4, the lowest reading since September 2023.
The significant decline in service sector activity led to a significant slowdown in the comprehensive business activity data. The services PMI unexpectedly fell to 49.7 from 52.9 in January due to political uncertainty, particularly regarding federal spending cuts and their potential impact on economic growth and inflation prospects, the PMI report said. Contrary to the decline in service sector activity, the manufacturing PMI rose faster than expected to 51.6.
The weak US PMI data has led to a modest increase in dovish bets from the Federal Reserve (Fed). The probability of the Fed cutting interest rates at its June meeting has risen to 63.5%, up from nearly 50% a week ago.
Meanwhile, concerns about a global slowdown due to US President Donald Trump’s tariff agenda have supported the US dollar. Trump has threatened to impose tariffs and retaliatory levies on lumber and forest products, semiconductors, pharmaceuticals, and cars.
Source: FXStreet
