LONDON – The Euro dipped below the crucial 1.0800 mark against the Dollar today, as a shift towards safer assets was triggered by Moody’s (NYSE:) downgrade of China’s credit rating. This event has heightened risk aversion among traders, leading to the Euro’s decline against the Dollar for the fifth consecutive day.
The downturn in the exchange rate comes despite positive economic indicators from the Eurozone. The Composite Purchasing Managers’ Index (PMI), which tracks economic trends in manufacturing and service sectors, rose to 47.6 month-over-month, surpassing expectations that it would remain at October’s level of 47.1. However, this uptick in PMI was not enough to support the Euro in light of broader market concerns.
Adding to the cautious sentiment was a notable decrease in the US Job Openings and Labor Turnover Survey (JOLTS) job openings, which fell to their lowest point in more than two years. On the other hand, the strength of the US economy was underscored by an unexpectedly robust Institute for Supply Management (ISM) Services PMI, which came in at 52.7. This figure indicates continued vigor within a key American economic sector and suggests that the labor market remains tight.
Looking ahead, forecasts indicate that while there may be some improvement in Eurozone Retail Sales on Wednesday, they are expected to stay negative year-over-year into October. Moreover, no growth is anticipated in Thursday’s release of Eurozone Gross Domestic Product (GDP) figures compared to last year’s data. The week is projected to conclude with Friday’s US Nonfarm Payrolls, which could show an increase from previous levels.
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