LONDON—The euro rose on Thursday for the first time this week, after data suggested the downturn in the eurozone economy may be starting to ease, although holidays in the United States and Japan kept trading activity muted. With markets shut in Japan and the United States for Thanksgiving holidays, currencies traded with some volatility, as liquidity was thinner than usual. A flurry of preliminary surveys showed recession in economic powerhouse Germany may be shallower than expected, which offset a downbeat read of French business activity. The euro rose broadly, gaining the most against the Swedish crown, after the Swedish central bank left rates unchanged, while also gaining on the yen and the Swiss franc. “There’s been a bit of an upside surprise on Germany and the euro zone and yes, it’s an improvement on the prior, but all this is saying is things are getting slightly less bad,” TraderX strategist Michael Brown said, of Thursday’s flash Composite Purchasing Managers’ Index (PMI) for November. The survey showed the eurozone economy is on track to contract again in the fourth quarter. The PMI covering the bloc’s dominant services industry rose to 48.2 this month from 47.8, slightly above the Reuters poll estimate for 48.1, but firmly in contraction territory. Manufacturing activity, which has contracted every month since July 2022, fell again in November. Its PMI rose to 43.8 from 43.1, beating the poll expectation for 43.4 but was still below breakeven. “It’s not exactly cause for much optimism … and basically reiterates what we already knew: that the economy is facing a tough winter ahead,” Mr. Brown said. By 1007 GMT, the euro was up 0.26 percent at $1.0914 but down 0.2 percent against sterling at 86.97 pence. Markets offered a muted reaction to a victory by right populist Geert Wilders in Wednesday’s parliamentary elections in the Netherlands. The European Central Bank (ECB) releases minutes of its October policy meeting later in the day. The Swedish Riksbank kept rates unchanged at 4 percent on Thursday and said it was ready to hike again if needed, but analysts said another rate rise was unlikely and the crown fell against the euro by as much as 0.5 percent at one point. It was last down 0.45 percent. Sterling recovered some ground against the dollar after dropping on Wednesday, as British finance minister Jeremy Hunt delivered a budget update that projected far less growth than previously forecast and a flurry of tax cuts and subsidies for Britain’s struggling economy. A separate read of UK business activity on Thursday showed companies reported a marginal return to growth in early November after three months of contraction, which gave the pound a small boost. Sterling was last up 0.5 percent on the day at $1.2558, having risen to a high of $1.2575 after the PMI data. Meanwhile, the dollar index fell for the first time since Monday, having bounced off 2–1/2 month lows the day before, after data showed the number of Americans filing new claims for unemployment benefits fell more than expected last week. Another worrying indicator for the Fed was a survey from the University of Michigan that showed consumers this month anticipate higher inflation both in the near and long term, particularly inflation over the next five years. “The dollar has partially rebounded after recent weakness … markets are reminded from the University of Michigan survey that inflation expectations for the next 1 and 5 years stay sticky, and that rates could stay higher for longer,” said Jeff Ng, head of Asia macro strategy at Sumitomo Mitsui Banking Corporation. Markets have dialled back expectations of Fed rate cuts in 2024, with futures now showing a 27 percent chance that the Fed cuts its target rate at the March 2024 policy meeting, a likelihood that increases to 40 percent when policymakers meet in May, according to CME Group’s FedWatch tool. The weakness in the dollar has buoyed the yen, along with expectations the Bank of Japan may shift away from its ultra-loose monetary policy next year. After pulling back from the brink of 152 per dollar at the start of last week, the yen hit a two-month high of 147.155 on Tuesday. It was last traded at 149.175. China’s yuan hovered around a four-month high against the dollar, supported by a firmer official mid-point fixing that market participants interpreted as an attempt to nudge the local currency higher. It was at 7.142, showing a 0.2 percent gain on the dollar. In cryptocurrencies, Binance chief Changpeng Zhao has stepped down and pleaded guilty to breaking criminal U.S. anti-money laundering laws as part of a $4 billion settlement resolving a years-long investigation into the world’s largest crypto exchange. Bitcoin rose nearly 5 percent on Wednesday and was last up another 0.4 percent at $37,581.