By Gertrude Chavez-Dreyfuss and Alun John

NEW YORK/LONDON (Reuters) -The euro rose on Wednesday in choppy trading, as a French no-confidence vote due later in the session seemed to have already been priced in the currency, while the U.S. dollar slipped as December interest rate cut chances firmed amid signs the American economy was slowing.

The South Korean won, one of the biggest movers on Tuesday, rose against the dollar, bolstered by suspected central bank intervention and the finance ministry’s pledge of “unlimited” liquidity support to markets. That came a day after South Korean President Yoon Suk Yeol declared martial law in a late-night television address, only to lift it hours later.

The euro climbed 0.1% against the dollar to $1.0522 ahead of a vote by French lawmakers on no-confidence motions which are all but certain to topple the fragile coalition of Prime Minister Michel Barnier.

The debate began at 4 p.m. in Paris (1500 GMT), with voting expected about three hours later, parliament officials said.

“The French vote has been partially priced in the euro because yesterday the headlines suggested that the outcome of the vote may be negative,” said Vassili Serebriakov, FX strategist at UBS in New York.

“We think the impact of French political risks would be negative … because the European economy today is much weaker. Europe is also facing challenges like tariff threats in the U.S. It’s also potentially more damaging for the euro because it comes at a time broader appetite for European assets is waning.”

Three sources told Reuters that French President Emmanuel Macron aims to install a new prime minister quickly if his government falls on Wednesday.

Barnier’s removal would deepen the political crisis in the euro zone’s second-largest economy, and could further weigh on the euro, which has fallen sharply since Donald Trump’s victory in November’s U.S. presidential election.

Investors also digested comments from European Central Bank President Christine Lagarde in a parliamentary hearing on Wednesday. She said the ECB will continue to lower rates, but did not commit to any pace of easing.

The ECB will next meet on Dec. 12, and economists overwhelmingly expect another 25 basis point rate cut, the fourth such move this year.

FED SEEN STILL CUTTING RATES IN DECEMBER

In the United States, the dollar index inched lower to 106.25, down 0.1%. Wednesday’s economic data did not shake expectations of an interest rate cut later this month.

U.S. private payrolls increased at a moderate pace in November, although it came below expectations, while annual wages for workers staying in their jobs edged up for the first time in 25 months.

Private payrolls rose by 146,000 jobs last month after advancing by a downwardly revised 184,000 in October, the ADP report showed. Economists polled by Reuters had forecast private employment increasing by 150,000 positions after a previously reported 233,000 jump in October.

At the same time, the U.S. services sector activity slowed in November after posting big gains in recent months. The Institute for Supply Management’s nonmanufacturing purchasing managers index slipped to 52.1 last month after surging to 56.0 in October, which was the highest level since August 2022. Economists polled by Reuters had forecast the services PMI easing to 55.5.

“Although the U.S. services sector is expected to continue fuelling the economic expansion, momentum has faded this quarter,” Priscilla Thiagamoorthy, senior economist at BMO, wrote in a research note. “That, along with a still-subdued ISM manufacturing index, suggests growth is likely moderating.”

U.S. fed funds futures raised the chances of a 25 basis point cut this month to 76%, from about 73% late Tuesday, while reducing the odds of a pause in easing to 24% from 27% the day before, according to the CME’s FedWatch tool.

The dollar edged higher after St. Louis Fed President Alberto Musalem said on Wednesday he expects the U.S. central bank to continue to cut rates, but said it is keeping its options open on the Dec. 17-18 meeting. Musalem will be a voter on the Federal Open Market Committee next year.

Markets will now await Chair Jerome Powell’s remarks this afternoon for clues on the Fed’s December decision, before turning to Friday’s jobs report.

In South Korea, the won regained some ground on Wednesday after plunging overnight in the wake of President’s declaration of martial law, which was reversed hours later.

The dollar was last down 0.7% at 1,414.5 won, after jumping overnight. But politics remained in focus and South Korean lawmakers on Wednesday submitted a bill to impeach President Yoon.

The dollar also climbed against the Japanese yen, rising 0.5% to 150.315.

Dealers said the country’s central bank may have supported the won at Wednesday’s open by selling dollars.

Currency              

bid

prices at

4

December​

04:17

p.m. GMT

Descripti RIC Last U.S. Pct YTD Pct High Low

on Close Change Bid Bid

Previous

Session

Dollar 106.25 106.32 -0.06% 4.81% 106.72 106.

index 12

Euro/Doll 1.0523 1.0509 0.13% -4.67% $1.0544 $1.0

ar 472

Dollar/Ye 150.25 149.26 0.66% 6.53% 151.22 149.

n 58

Euro/Yen 1.0523​ 157.18 0.6% 1.6% 158.65 156.

99

Dollar/Sw 0.8836 0.8862 -0.29% 5% 0.8879 0.88

iss 34

Sterling/ 1.2703 1.2673 0.26% -0.15% $1.2712 $1.2

Dollar 63​

Dollar/Ca 1.4075 1.407 0.04% 6.19% 1.4083 1.40

nadian 52

Aussie/Do 0.643 0.6487 -0.85% -5.66% $0.6488 $0.6

llar 399

Euro/Swis 0.9296 0.9314 -0.19% 0.13% 0.9327 0.92

s 92

Euro/Ster 0.8281 0.829 -0.11% -4.44% 0.8301 0.82

ling 7

NZ 0.5857 0.5882 -0.43% -7.31% $0.5883 0.58

Dollar/Do 3

llar

Dollar/No 11.0477​ 11.0478 0% 9% 11.0975 11.0

rway 317

Euro/Norw 11.6235 11.6262 -0.02% 3.56% 11.644 11.6

ay 01

Dollar/Sw 10.9485 11.0039 -0.5% 8.76% 11.0409 10.9

eden 323

Euro/Swed 11.5217 11.5695 -0.41% 3.56% 11.5865 11.5

en 166

(Reporting by Gertrude Chavez-Dreyfuss in New UKevin Buckland, Alun John and Greta Rosen Fondahn; Editing by Muralikumar Anantharaman, Kim Coghill, Gareth Jones and Jonathan Oatis)

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