The euro remained at a nine-month high against the dollar. Still, European stocks fell after regional business activity data confirmed expectations that the European Central Bank (ECB) will raise interest rates by another 50 basis points.
According to a survey, eurozone business activity unexpectedly increased in January, indicating that the bloc’s downturn may not be as severe as previously thought.
The flash Composite Purchasing Managers’ Index (PMI) from S&P Global rose to 50.2 this month from 49.3 in December, the first time it has been above 50 since June.
However, the flash Composite Purchasing Managers’ Index (PMI) in the United Kingdom fell to 47.8 in January from 49.0 in December, the lowest level since January 2021.
MSCI’s world index was steady, reaching a new seven-month high early, following gains in the United States overnight and in Asia earlier in the day.
After the activity data, Europe’s broad Stoxx 600 index fell 0.4%, implying that the ECB can continue raising rates to curb inflation without fear of harming growth.
The euro and other neighboring currencies have continued to benefit from hopes of a better economic outlook in Europe and suggestions that the US Federal Reserve is slowing rate hikes more quickly than the ECB.
The euro was steady at $1.0865, just off its nine-month high of $1.0927 set the day before. After the British data, the sterling fell 0.5% to $1.231, retreating from Monday’s seven-month high.
The Dollar Index Is Now at 102.04, Close to A Seven-Month Low
Global government bond yields were muted, with the benchmark 10-year Treasury yield in the United States falling 2 basis points to 3.5042%. Germany’s 10-year yield remained stable at 2.19%.
Amid optimism about China’s reopening, oil has largely maintained recent gains. At $88.81, Brent crude was down 0.1% from the nearly eight-week high of $89.09 on Monday.
Gold was up 0.2% after earlier reaching a new nine-month high, as the precious metal continued to benefit from a weaker dollar.
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