Euro was able to reduce some of the losses it incurred against the US dollar today, which amounted to 0.35% and fell to about 0.18% at approximately 1:30 p.m. GMT.
The euro’s movements today came after a slower-than-expected decline in inflation and a slowdown in the pace of contraction in manufacturing activities in light of some improvement in demand and business confidence in the region.
Today, we witnessed the preliminary reading of inflation figures for last January in the Eurozone, which generally indicated a continued decline in inflation.
On an annual basis, inflation fell less than expected to 2.8% from 2.9% in December while prices contracted by 0.4% on a monthly basis, in line with expectations.
Excluding volatile food and energy items, core inflation fell to 3.3% on an annual basis in January, the slowest pace of growth since March 2022. On a monthly basis, prices contracted at the fastest pace in nearly two years, by 0.9%.
We also saw a series of final readings of manufacturing PMIs data across the Eurozone. While most of today’s numbers indicated a slowdown in the contraction of factory activities, in light of the slowdown in the pace of decline in orders and new business to the lowest levels in months, in addition to better conditions for employment and an increase in levels of business confidence to the highest levels in nine months, according to HCOB / S&P Global reports.
While reports, in Germany specifically, also indicated that generally weak demand conditions continue to cloud factory activities, in light of concerns about geopolitical tensions and difficult financial conditions.
