• The US Dollar Index (DXY) rallied to a fresh two-year high after Eurozone PMI data suggested the region’s economy is contracting.
• The US Dollar is also supported by safe-haven flows amid escalating geopolitical risks in the Russia-Ukraine war.
• The US Dollar Index pops above 108.00 and eases slightly afterward. 

The US Dollar (USD) jumps on Friday to its highest level in two years, with the DXY US Dollar Index popping above 108.00, as Purchasing Managers Index (PMI) data for the Eurozone signaled that the region’s economy fell back into contraction in November. The data weighed heavily on the Euro (EUR) – the main foreign currency forming the DXY – as it could mean more interest rate cuts ahead by the European Central Bank (ECB) in order to support growth. 

Earlier on Friday, the final reading for the German Gross Domestic Product (GDP) was downwardly revised to 0.1%, which means that the Eurozone’s largest economy barely grew in the third quarter.

Adding to the Euro weakness, the US Dollar keeps getting support from safe-haven flows due to the escalating war between Russia and Ukraine. According to Yahoo News, Russia has put a US military base in Poland at the top of its priority list of targets for the next retaliations.

The US economic calendar features the preliminary S&P Global PMI readings for November as well. After the big miss from the European PMI numbers, robust figures for the US could fuel further US Dollar strength. Apart from that, the final reading for the University of Michigan Consumer Sentiment survey will also be released.