FX.co ★ Euro Falls on Weak PMI Data and Debt Concerns

The euro hovered around $1.12, staying near multi-month lows after weaker-than-expected PMI data, as worries over social unrest and mounting public debt across Europe continued to pressure the currency. Flash figures showed that eurozone private-sector activity in October slowed to a four-month low, weighed down by rising energy costs, tighter financial conditions, and a renewed downturn in France amid heightened political and fiscal uncertainty. Consumer confidence also deteriorated more sharply than anticipated. At the same time, investors remained focused on climbing borrowing costs across the bloc, particularly in France, where 10-year government bond yields hit new 24-year highs and the risk premium rose to levels last seen during the 2011 eurozone sovereign debt crisis. Looking ahead, further protests are expected across the region over the weekend, while markets await next week’s inflation figures and the ECB’s policy meeting, where interest rates are widely expected to be left unchanged.