The U.S. dollar remained stable after two sessions of gains as the London session opened, driven by heightened risk aversion stemming from the escalating conflict in the Middle East.
Investors could flock to safe-haven assets, potentially boosting demand for the dollar. At the same time, the euro could come under pressure amid concerns over Europe’s economic slowdown and the possibility of further interest rate cuts.
In Europe, attention has shifted to key economic data releases. The Eurozone’s unemployment rate remained stable at 6.4%, while the services PMI is forecast to fall to 50.5 while the manufacturing sector contracted.
However, France’s Services PMI is expected to fall to 48.3, underscoring the country’s strained economic conditions, further exacerbated by a growing fiscal deficit and the looming risk of tax increases.
Meanwhile, in the U.S., attention turns to key labor market data. Non-farm payrolls are projected to decline compared to the previous month, heightening economic concerns. The USD could see strong volatility as the market reacts to new data.
