Euro Bounces Back as Weak U.S. Data Shakes the Dollar

The euro regained ground against the U.S. dollar after slipping earlier in the session, as disappointing U.S. manufacturing data weighed on the greenback and shifted market sentiment.

The move reflected a broader reassessment of the dollar’s strength, following signs that U.S. economic momentum may be losing pace.


Soft U.S. Data Triggers a Turnaround

The U.S. dollar came under pressure after fresh indicators pointed to ongoing weakness in the manufacturing sector. The data reinforced concerns that economic activity remains subdued, prompting traders to trim earlier dollar positions.
As the dollar retreated, the euro found room to recover, erasing part of its intraday losses and stabilizing as the session progressed.


Geopolitical Tensions Add to Market Unease

Beyond economic data, geopolitical developments added another layer of uncertainty. Escalating events in Venezuela over the weekend initially boosted demand for safe-haven assets, supporting the dollar early in the day.

However, as markets shifted focus back to economic fundamentals, that support faded, allowing major currencies to rebalance.


Policy Divide Keeps Euro Supported

Underlying the euro’s resilience is the growing contrast between monetary paths in the United States and the euro area. While expectations continue to build that U.S. policy may turn more accommodative, the outlook in Europe appears steadier, offering the single currency relative support.

This divergence has helped limit downside pressure on the euro, even during periods of heightened global uncertainty.


All Eyes on the Next Data Wave

Attention now turns to a packed slate of upcoming economic releases on both sides of the Atlantic. These figures are expected to play a decisive role in shaping near-term currency moves, as investors look for clearer signals on growth, employment, and overall economic direction. Until then, trading conditions are likely to remain sensitive, with currencies responding quickly to any shift in data or global developments.