- The Euro advances on Wednesday, while the US Dollar falls overall.
- The unexpected decline in the US ISM services PMI has eased concerns about a hawkish turn by the Fed.
- Earlier on Wednesday, the Eurozone CPI reflected softer-than-expected price pressures in March.
The Euro is experiencing a strong recovery in the American session on Wednesday. The pair has rallied about 60 pips after US service sector activity was weaker than expected, easing fears of a Federal Reserve turnaround.
Data released by the ISM Insitute revealed that business activity in the services sector slowed to 51.4 in March from 52.6 the previous month, compared to expectations of a slight acceleration to 52.7. Furthermore, the prices paid subindex has dropped to 53.4 from 58.6 in February and 64 in January, confirming the sector's disinflationary trend.
The PMI numbers have offset the impact of a strong ADP report, which suggests a resilient labor market ahead of Friday's Nonfarm Payrolls report. Later on Wednesday, Atlanta Fed President Bostic and Fed Chair Jerome Powell cooled hopes for imminent rate cuts, albeit without a significant impact on the pair.
During the European session, Eurozone CPI figures confirmed the weak inflation readings seen in Germany on Tuesday. Core inflation has fallen below 3% annually, and the headline CPI has dropped to 2.4%, well below the 2.6% expected by the market. These figures pave the way for the ECB to cut rates in the coming months, although the impact on the Euro has been marginal.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
