The euro rose in European trading on Friday against a basket of global currencies, attempting to recover from a two-week low against the US dollar as bargain-hunting emerged at lower levels. The move comes ahead of key economic releases in Europe covering activity in major sectors during November.

Despite the uptick, the single European currency is still heading for a weekly loss, as investors continue to favor the US dollar as the most attractive assetespecially after the likelihood of a Federal Reserve rate cut in December declined.

Price overview

EUR/USD today: the euro rose more than 0.1% to 1.1542 dollars, up from the opening level of 1.1528 dollars, after touching a low of 1.1521 dollars.

The euro ended Thursday down 0.1% against the dollarits fifth straight daily lossand hit a two-week low of 1.1502 dollars following stronger-than-expected US labor-market data.

Weekly performance

So far this weekending with todays settlementthe euro is down roughly 0.75% against the US dollar, on track for its first weekly loss in three weeks.

US dollar

The dollar index fell 0.1% on Friday, backing away from a two-week high of 100.36 and heading toward its first loss in six sessions, reflecting a pause in the US currencys recent upward momentum against major and minor peers.

Beyond profit-taking, the dollar eased as investors refrained from building additional long positions ahead of key US sector data and further commentary from Federal Reserve officials.

More hawkish remarks from Fed policymakers, coupled with stronger-than-expected US job-creation figures for September, pushed down the odds of a December rate cut.

According to CMEs FedWatch tool, the market-implied probability of a 25-basis-point rate cut in December fell this week from 48% to 30%, while the probability of no change rose from 52% to 70%.

European rates

Money-market pricing places the probability of a 25-basis-point ECB rate cut in December at roughly 25%.

To reassess these expectations, investors are awaiting a series of key European sector data releases today, which will offer stronger evidence on the eurozones growth momentum heading into the fourth quarter.

Euro outlook

At Economies.com, we expect that if incoming European data disappoints, the likelihood of an ECB rate cut in December will riseplacing additional downside pressure on the euro against a basket of currencies.