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What’s happening: The euro rose slightly this morning, after remaining under pressure on political uncertainty.
What happened: The French government collapsed after a historic no-confidence vote on Wednesday.
Although weakness in the US dollar lent support to the EUR/USD, the forex pair was unable to breach 1.05.
Why it matters: The European Union’s second-largest economy had been facing political instability for some time. France’s lower house of parliament, known as the National Assembly, had no single party holding a majority and the dispute around the country’s massive budget deficit had been escalating.
France’s far right and left-wing lawmakers came together to vote for Prime Minister Michel Barnier to be ousted after the submission of his draft budget. French lawmakers cast their votes in a no-confidence motion late Wednesday, which resulted in the first successful ousting since 1962.
France’s political uncertainties had been exerting pressure on the euro. The EUR/USD had shed more than 2.6% over the past month, which the EUR/GBP was down around 1.4%. With the vote now cast, the euro recovered slightly this morning.
Some weakness in the US dollar lent support to the EUR/USD forex pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, slipped to 106.32 on Wednesday.
The EUR/USD added 0.08% to 1.0518 this morning. The forex pair has lost 0.32% over the last five trading days.
The EUR/GBP rose by 0.06% to 0.8280 this morning. The pair has lost 0.46% over the last five trading session.
What to watch: Investors await the release of construction PMI data from the Eurozone (1230 UAE Time), France (1230 UAE Time) and Germany (1230 UAE Time) today.
The release of the Eurozone’s data on retail sales (1400 UAE Time) will also be in focus.
Context: US stocks climbed on Wednesday, taking all three major stock indices to record highs.
Details: Data released on Wednesday showed that US private payrolls had gained modestly during November, with private businesses adding 146,0000 workers, versus 184,000 in October.
The S&P Global services PMI was revised lower to 56.1 in November, compared to a preliminary reading of 57. Despite this, the figure was still higher than the reading of 55 in October. The ISM services PMI fell to 52.1 in November, from 56 in the previous month.
Federal Reserve Chairman Jerome Powell said that the US central bank is not in a rush to slash interest rates. He also highlighted that the economy remains strong and that inflationary pressures were persisting.
Markets are expecting the Federal Reserve to announce an interest rate cut at the upcoming meeting this month.
Shares of Salesforce surged to an all-time high on Wednesday, after the company reported better-than-expected quarterly revenue and raised the lower end of its revenue outlook for the year.
Marvell Technology’s stock jumped around 23.2% to reach a record high, after the company issued an upbeat revenue forecast for the fourth quarter. The S&P 500 technology index climbed to a record closing high.
The Dow Jones index jumped by 308.51 points, or 0.69%, to close at 45,014.04 on Wednesday. The S&P 500 climbed 0.61% to 6,086.49, while the Nasdaq 100 surged 1.24% to settle at 21,492.36.
What to watch: Investors await the release of economic data on Challenger job cuts (1630 UAE Time), balance of trade (1730 UAE Time) and initial jobless claims (1730 UAE Time) from the US today. The trade deficit in the US, which widened to $84.4 billion in September, is expected to narrow to $75 billion in October.
Analysts expect US employers to announce 49,000 job cuts in November, compared to 55,597 cuts in October. US initial jobless claims, which came in steady at 213,000 in the week ending November 23, are expected to rise to 215,000 in the latest week.
Other Markets: European indices closed higher on Wednesday, with the DAX 40, CAC 40 and STOXX Europe 600 Index up by 1.08%, 0.66% and 0.37%, respectively.
Donald Trump’s advisors are floating proposals to end the ongoing war between Russia and Ukraine. The news sent the RUB/USD pair slightly lower in forex trading this morning.
The Philippines said its annual inflation rate accelerated to 2.5% in November, from 2.3% in the previous month. The latest reading being higher than market estimates of 2.4% exerting pressure on the PHP/USD forex pair.
Australia’s trade surplus on goods widened to A$5.95 billion in October, from A$4.53 billion in the previous month. The data topping market estimates of A$4.55 billion sent the AUD/USD pair higher in forex trading this morning.
Thailand’s annual inflation rate rose to 0.95% in November, from 0.83% in the previous month. However, the reading came in lower than market expectations of 1.12%, lending support to the THB/USD forex pair.
South Korea’s economy expanded by 0.1% in the third quarter, compared to a previous reading of a 0.2% decline. Despite this, the KRW/USD pair fell in forex trading this morning.
Italy’s HCOB construction PMI (1230 UAE Time), UK’s new car sales (1300 UAE Time) and S&P Global construction PMI (1330 UAE Time), South Africa’s current account (1300 UAE Time), Turkey’s foreign exchange reserves (1530 UAE Time), Brazil’s car production (1700 UAE Time), new car registrations (1700 UAE Time) and balance of trade (2200 UAE Time), Canada’s balance of trade (1730 UAE Time) and Ivey PMI (1900 UAE Time), as well as US continuing jobless claims (1730 UAE Time) and EIA Natural gas stocks change (1930 UAE Time).
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