EUR/USD higher as economic data signals downturn easing

The euro climbed against major currencies on Thursday following data indicating the euro zone’s economic decline may be moderating, although with U.S. and Japanese markets closed for holidays thin liquidity has kept price action choppy.

At 10:00 GMT, the euro was up at $1.0931 but later retraced to $1.0902. Surveys showed the German recession could be less severe than feared, offsetting a gloomy French activity read. The euro strengthened broadly, gaining most versus the Swedish krona after Sweden’s central bank held rates.

November’s eurozone composite PMI edged up to 47.8, still signalling contraction but topping forecasts. The larger services PMI rose to 48.2 while manufacturing slipped despite exceeding estimates.

Analysts said data confirms a harsh winter ahead although the economy may be bottoming out. Markets were little moved by far-right populist Geert Wilders’ election victory in the Netherlands.

Sterling recovered to $1.2543 after dropping on Wednesday’s UK budget update, lifted slightly by better-than-expected British PMIs. The dollar dipped to 149.36 yen, giving up recent gains as U.S. jobless claims fell more than forecast.