• EUR/USD faces a significant downturn, falling 0.89% to 1.0893 in late New York trading.
• Eurozone business activity disappoints, with S&P Global reporting contractions in Germany and France.
• Mixed data in the US bolstered the Greenback, which staged a comeback against the Euro.

The EUR/USD tumbled sharply late in the New York session after hitting a ten-day high of 1.1009, but better than expected data from the United States (US), coupled with weaker than expected business activity report from the Eurozone (EU) was the perfect storm for the bears. Hence, the major is trading at 1.0893, down 0.89%.

Disappointing Eurozone PMIs, portrays a gloomy scenario for the Euro

The Euro (EUR) was bolstered by the European Central Bank (ECB) President Christine Lagarde's hawkish approach, taking a blueprint of the Fed Chair Jerome Powell's book on things not to do following a monetary policy decision. Although Powell failed to push back against speculations on rate cuts, it exacerbated the EUR/USD rally past the 1.1000 mark.

However, on Friday, the NY Fed President John Williams said it’s “premature” to talk about rate cuts at the March meeting, lifting the US 2-year Treasury note rate six basis points to 4.449%.

Data-wise, the Fed revealed that industrial production in the US gathered steam at 0.2% MoM, up from -0.9% contraction, but missed estimates. Further data revealed by S&P Global suggests the US economy is in good shape despite 500 bps of tightening by the US central bank.

Nevertheless, the New York Fed Empire State Manufacturing Index plunged by -14.5 in December, less than expectations and below November’s 9.1.

On the Eurozone (EU) front, business activity continued to deteriorate, revealed a poll by S&P Global. The agency revealed that activity in Germany and France shrank, while in the EU, none of the three Flash PMI indices were in expansionary territory. This poured cold water on yesterday’s words by ECB’s President Lagarde, spurring a 90-plus pip plunge in the EUR/USD.