EUR/USD steadies after Eurozone PMIs, US labour data

The EUR/USD pair surges by half a percent on Thursday, reaching 1.0970 before settling into the 1.0960 neighborhood as markets digest data from both sides of the Pacific.

The Eurozone’s HCOB Composite Purchasing Managers’ Index (PMI) beat expectations early Thursday, printing at 47.6 for December versus the median market forecast of a steady hold of 47.0 to match November’s headline figure.

Much of the Composite PMI’s upside came from a healthy uptick in the HCOB Services PMI component, which climbed to 48.8 compared to the expected 48.1.

Despite beating expectations, both PMI components remain in contraction territory, with the Composite PMI printing below 50.0 for a seventh straight month. The US ADP Employment Change for December jumped unexpectedly to 164K, easily clearing the forecast 115K and hurdling over November’s 101K ADP jobs additions.

Friday brings a double-header of high-impact data on both continents, with the Eurozone Harmonized Index of Consumer Prices (HICP) for the year ended December expected to rebound from 2.4% to 3.0% as inflation impacts the European economy.

The US NFP for December is expected to show 170K new jobs additions compared to November’s 199K. US Average Hourly Earnings are expected to ease slightly from 0.4% to 0.3% MoM in December, and the ISM Services PMI follow-up is expected to tick down from 52.7 to 52.6 in December.