In March, the Eurozone HCOB Services PMI registered at 50.4, falling short of the expected 51. This outcome reflects a moderate expansion in the services sector, yet it indicates a slowdown in growth compared to previous months.
In currency markets, the EUR/USD pair remained around 1.0850, recovering from earlier losses. The performance was influenced by easing concerns over potential tariffs from the US.
British Pound Holds Steady
Meanwhile, GBP/USD held steady near 1.2950, buoyed by positive UK private sector activity data for March. Additionally, gold prices stabilised above $3,020 amid ongoing geopolitical developments.
Attention will shift toward upcoming inflation data from both the US and UK, and the release of flash PMIs in the Eurozone is anticipated as well.
The weaker-than-anticipated services PMI for the Eurozone suggests the region’s economic growth may be losing some momentum. A reading just above 50 indicates expansion, but the softer figure points to a slower pace than what markets had hoped for. This is especially relevant given prior months showed a stronger trend.
On the currency front, the euro’s ability to recover against the dollar suggests traders are reassessing earlier concerns. While worries regarding trade policies temporarily weighed on sentiment, the absence of immediate tariff risks has allowed the pair to regain ground. That being said, underlying confidence in the euro could remain fragile should economic indicators continue to disappoint.
Sterling’s steadiness can be attributed to encouraging data from the UK’s private sector. With March figures painting a stable picture, confidence in the pound has been maintained. However, upcoming inflation figures will be watched closely, as they could sway expectations regarding the Bank of England’s next steps.
Gold Prices Remain Firm
Meanwhile, gold’s position above $3,020 signals that investors remain aware of broader geopolitical tensions. The precious metal’s stability suggests demand for safe-haven assets has not faded, even as markets digest recent developments.
Attention now turns to upcoming inflation reports from the US and UK, which could influence central bank expectations. Additionally, the flash PMIs from the Eurozone will provide further insight into whether recent economic softness is a temporary blip or the start of a broader trend. Market participants will need to assess these data points carefully, as they hold strong potential to drive volatility in the weeks ahead.
