EUR/USD rebounds modestly from multi-decade lows, stays below 0.9800

• EUR/USD trades deep in negative territory below 0.9800.
• Safe-haven flows continue to dominate the financial markets ahead of the weekend.
• DXY holds above 112.00 ahead of S&P Global PMI data.

EUR/USD erased a small portion of its daily losses after having touched its lowest level in two decades at 0.9737 earlier in the day. The pair was last seen trading at 0.9770, where it was still down 0.65% on a daily basis. For the week, EUR/USD is down over 2%.

The data from the euro area and Germany showed that the business activity in the private sector continued to contract at an increasing pace in early September. S&P Global Composite PMI for the eurozone and Germany declined to 48.2 and 45.9, respectively.

Meanwhile, the dollar continued to benefit from safe-haven flows and put additional bearish pressure on EUR/USD. At the time of press, the Euro Stoxx 600 Index was down 2% on the day and the US stock index futures were losing between 1.1% and 0.9%.

Later in the session, S&P Global will release the Manufacturing and Services PMI data for the US. Inversors expect the Services PMI to remain well below 50 and see the Manufacturing PMI holding above 51. 

Finally, FOMC Chairman Jerome Powell will speak at the virtual Fed Listens event hosted by the Federal Reserve Bank of Dallas at 1800 GMT.

Technical levels to watch for