By Bizwatch Nigeria Limited,Boluwatife Oshadiya
Copyright bizwatchnigeria
The euro edged lower on Thursday, sliding to around $1.178 against the U.S. dollar after lackluster German business data cast doubts on the Eurozone’s recovery momentum. The single currency had previously climbed to a four-year peak of $1.192 last week but has since lost ground.
Germany’s Ifo Business Climate Index fell to 87.8 in September from 88.9, signaling deteriorating sentiment among companies. Both the Current Situation Index (85.7) and Expectations Index (89.7) declined, with the institute warning that hopes for a swift recovery have been dealt a setback.
Weakness was evident across multiple sectors. Manufacturing confidence slid further on the back of weaker orders and reduced optimism from capital goods producers. Services sentiment plunged to -3.0, its lowest level since February, while the trade sector also turned negative. Only construction showed mild improvement.
This downbeat reading followed a mixed HCOB PMI report showing that while services activity in the Eurozone grew faster than expected, manufacturing continued to contract.
At the same time, markets assessed comments from Federal Reserve Chair Jerome Powell, who reiterated caution over the pace of monetary easing, citing inflationary risks tied to tariffs and labor market pressures. Powell described September’s rate cut as a “risk management” measure rather than the beginning of a broader easing cycle.
Investors now see a 90% probability of another Fed rate cut in October, with Friday’s U.S. PCE inflation report in focus. Meanwhile, the European Central Bank has signaled it may pause rate reductions, citing lingering inflation risks from services, food, and fiscal spending.
Elsewhere, the Chinese yuan recovered some ground after the People’s Bank of China set a stronger-than-expected reference rate at 7.1118 per dollar. The move, coupled with signs of easing U.S.-China trade tensions, helped boost investor confidence even as markets await clarity on future policy directions.
