EUR/USD slumps to seven-week lows near 1.1020

The broad-based USD strength in the second half of the day caused the EUR/USD pair to slump to its lowest level since early December at 1.1023. As of writing, the pair was down 0.25% on the day at 1.1025. For the week, the pair is erasing more than 60 pips and is looking to register losses for the fourth straight time.

PMI data drive FX markets on Friday

Earlier in the day, the Markit Manufacturing PMI for the eurozone rose to 47.8 in January from 46.3 in December but failed to help the shared currency gather strength as the Services PMI dropped to 52.2 from 52.8 to keep the Composite PMI unchanged at 50.9.

In the meantime, during a panel discussion at the World Economic Forum on Friday, European Central Bank President Christine Lagarde noted that they were not seeing a transmission from wages to inflation. "We're seeing inflation moving a teeny, tiny little bit but this is really minor," Lagarde added.

In the second half of the day, the US Dollar Index, which tracks the USD's value against a basket of six major currencies, rose to its highest level in more than seven weeks at 97.92 supported by the latest PMI figures.

Although the IHS Markit's Manufacturing PMI fell to 51.7 in January, the Composite PMI climbed to 53.1 from 52.7 to show that the economic activity in the private sector continued to expand at a more robust pace than it did in December. Assessing the data, "the recovery of growth momentum across the US private sector continued to quicken at the start of 2020, with overall output rising at the sharpest pace since last March," noted Siân Jones, Economist at IHS Markit.

Technical levels to watch for