- The Euro extends its decline from last week’s highs near 1.1670 to fresh three-month lows near 1.1500
- The pair depreciated nearly 1.3% in a four-day sell-off US Dollar rallied on Fed hawkishness.
- Manufacturing activity data from the Eurozone confirmed that the sector remained stalled in October.
EUR/USD extends losses for the fourth consecutive day on Monday, trading at 1.1515 at the time of writing after hitting fresh multi-month lows right above 1.1500. The confirmation that Eurozone manufacturing activity improved to a standstill in October has failed to provide any significant support to the pair, which remains on its back foot since the Federal Reserve (Fed) and the European Central Bank (ECB) released their monetary policy decisions last week.
The Fed Chairman, Jerome Powell, played down market expectations that the bank would lower borrowing costs further in December, curbing investors’ appetite for risk and triggering a US Dollar rally that has extended into the start of the current week.
In Europe, October’s HCOB Manufacturing Purchasing Managers’ Index confirmed the preliminary estimations, pointing to a slight improvement in the sector’s activity, to a level of 50.0 from 49.8 in September. These figures come shortly after the President of the Deutsche Bundesbank and European Central Bank’s Monetary Committee member Joachim Nagel affirmed on Monday that economic data is not diverging from the central bank’s projections, but that all options remain open for the next meeting.
Investors’ mood remains cautious, with all eyes on the final release of the Eurozone Manufacturing Purchasing Managers Index (PMI) for October, due at 09:00 GMT on Monday, and the US ISM Manufacturing PMI, due later in the day. Beyond that, ECB board member Phillip Lane is expected to meet the press during the European session, while, in the American trading session, Fed officials Mary Daly and Lisa Cook might provide further insight into the bank’s monetary policy plans.
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