EUR/USD pressured as Spain manufacturing PMI contracts unexpectedly

EUR/USD faced renewed selling pressure in early European trading as Spain's manufacturing sector unexpectedly slipped back into contraction territory. The December PMI reading of 49.6 fell short of the 51.0 forecast and declined sharply from November's 51.5, marking the first contraction since April. The disappointing data reflects weakening demand conditions across the eurozone's fourth-largest economy, with manufacturers reporting significant declines in both output and new orders. Employment conditions deteriorated markedly as companies opted against renewing temporary contracts, resulting in the steepest monthly job losses in two years. This weakness in Spanish manufacturing adds to concerns about eurozone economic momentum heading into 2025, potentially limiting the European Central Bank's ability to pause its easing cycle. Technical indicators show EUR/USD testing support near 1.0420, with further downside risks if eurozone-wide PMI data disappoints.