ForexLive European FX news wrap: Euro falls after soft PMI data

<p>Headlines:</p><ul><li><a href="https://www.forexlive.com/news/euro-dips-further-as-german-pmi-also-disappoints-20231215/">Euro dips further as German PMI also disappoints</a></li><li><a href="https://www.forexlive.com/news/germany-december-flash-manufacturing-pmi-431-vs-432-expected-20231215/">Germany December flash manufacturing PMI 43.1 vs 43.2 expected</a></li><li><a href="https://www.forexlive.com/news/france-december-flash-services-pmi-443-vs-460-expected-20231215/">France December flash services PMI 44.3 vs 46.0 expected</a></li><li><a href="https://www.forexlive.com/news/eurozone-december-flash-services-pmi-481-vs-490-expected-20231215/">Eurozone December flash services PMI 48.1 vs 49.0 expected</a></li><li><a href="https://www.forexlive.com/news/uk-december-flash-services-pmi-527-vs-510-expected-20231215/">UK December flash services PMI 52.7 vs 51.0 expected</a></li><li><a href="https://www.forexlive.com/centralbank/ecbs-holzmann-there-was-no-discussion-of-a-change-to-rates-at-latest-meeting-20231215/">ECB's Holzmann: There was no discussion of a change to rates at latest meeting</a></li><li><a href="https://www.forexlive.com/centralbank/ecbs-villeroy-next-policy-move-should-be-lowering-rates-barring-any-surprises-20231215/">ECB's Villeroy: Next policy move should be lowering rates barring any surprises</a></li><li><a href="https://www.forexlive.com/centralbank/ecbs-villeroy-nobody-suggested-rate-cuts-at-latest-meeting-20231215/">ECB's Villeroy: Nobody suggested rate cuts at latest meeting</a></li><li><a href="https://www.forexlive.com/centralbank/ecbs-muller-says-too-early-to-talk-about-rate-cuts-in-the-near-term-20231215/">ECB's Muller says too early to talk about rate cuts in the near-term</a></li><li><a href="https://www.forexlive.com/news/france-november-final-cpi-35-vs-34-yy-prelim-20231215/">France November final CPI +3.5% vs +3.4% y/y prelim</a></li><li><a href="https://www.forexlive.com/news/eurozone-october-trade-balance-111-billion-vs-100-billion-prior-20231215/">Eurozone October trade balance €11.1 billion vs €10.0 billion prior</a></li><li><a href="https://www.forexlive.com/news/bundesbank-sees-german-economy-contracting-this-year-then-mild-growth-in-2024-20231215/">Bundesbank sees German economy contracting this year, then mild growth in 2024</a></li><li><a href="https://www.forexlive.com/news/china-says-to-extend-interbank-foreign-currency-trading-hours-20231215/">China says to extend interbank foreign currency trading hours</a></li></ul><p>Markets:</p><ul><li>AUD leads, EUR lags on the day</li><li>European equities higher; S&amp;P 500 futures up 0.2%</li><li>US 10-year yields down 2.6 bps to 3.903%</li><li>Gold up 0.3% to $2,042.61</li><li>WTI crude up 0.9% to $72.20</li><li>Bitcoin down 0.7% to $42,701</li></ul><p>After a bustling last couple of days, things are calming down for the most part as we get towards the final stretch of the week. The dollar remains mostly softer across the board but the losses so far today are only slightly. Instead, it is the euro that is proving to be the laggard.</p><p>That comes after softer French and German PMI data, which puts some pressure on the ECB to perhaps cut rates faster. And that is a bit of a challenge to the rhetoric they were trying to sell yesterday, including the remarks by some policymakers today.</p><p>EUR/USD dipped from 1.0990 to 1.0950 and is holding at the lows for the day currently, while EUR/GBP fell from 0.8605 to 0.8580 in the aftermath. UK PMI data was solid but the pound is not really too enthused despite that.</p><p>In other markets, gold is sitting slightly higher amid a softer dollar just above $2,040 while equities are also keeping some light optimism. Stocks have experienced a great week, helped by a more dovish Fed and look to close things out on a more positive note. As for bonds, the rally is continuing with 10-year Treasury yields now down towards 3.90% as traders remain convinced that we have reached a crucial pivot on rates.</p>

This article was written by Justin Low at www.forexlive.com.