News Column

Euro Falls Amid Weak PMI Data From Europe

June 23, 2014

CANBERA (Alliance News) - The European currency weakened against the other major currencies in the early European session on Monday, as private sector business activity across European nations weakened in June.

The survey data from Markit Economics showed the flash headline index covering output of both manufacturing and services fell to 52.8 from 53.5 in May. The score was above the neutral 50 mark, but below economists' forecast of 53.4.

Germany's private sector expanded at the slowest pace in eight months in June, flash survey data from Markit Economics revealed.

The flash composite output index declined to 54.2 in June from 55.6 in May. Despite softening to the weakest in eight months, the pace of growth remained above the long-run series average.

The services Purchasing Managers' Index dipped to 54.8 from 56 in May. The score was expected to drop moderately to 55.8.

The French private sector contracted further in June, reflecting weakness in new orders and employment, flash survey data from Markit Economics showed.

The flash Markit composite output index came in at 48, a four-month low, and down from 49.3 in May. A score below 50 indicates contraction in the private sector.

The euro dropped to 0.7976 against the pound around 3:30 am ET, from an early high of 0.7988 and held steady thereafter.

The euro which ended yesterday's deals at 1.3596 against the US currency fell to 1.3581, from an early high of 1.3612. On the downside, 1.34 is seen as next support level for the euro.

Having risen to a multi-day high of 1.4496 against the Australian dollar, the euro slipped to a 1-week low of 1.4387. If the euro continues its downtrend, it is likely to find support around the 1.42 region.

The euro edged down to 1.2169 against the Swiss franc, from an early high of 1.2176.The euro may test support near the 1.20 area. zone.

Against the yen, the euro dropped to a 6-day low of 138.28 from an early high of 138.80. If the euro extends its downtrend, it is likely to find support around the 137.11 area.

An index monitoring the manufacturing sector in Japan came in with a score of 51.1 in May, the latest survey from Markit Economics revealed- up from 49.9 in April. That pushes the index into expansionary territory, as a score above 50 signals growth in a sector while a reading below means contraction.

The euro slipped to a 5-1/2- month low of 1.4557 against the Canadian dollar, from an early high of 1.4625. The next possible downside target level of the euro is seen at 1.44 area.

The euro fell to a 1-year low of 1.5538 against the NZ dollar, from an early high of 1.5625. The pair was quoted at 1.5622 at yesterday's close . If the euro extends its downtrend, it is likely to find support around the 1.54 area.

New Zealand credit card spending rose at a faster year-over-year rate in May, figures from the Reserve Bank of New Zealand showed.Total credit card billing rose a seasonally adjusted 7.5% year-over-year in May, a faster rate of increase than the 3.2% rise in April.

Looking ahead, Markit's USmanufacturing PMI for June and existing home sales for May are due to be released in the New York session.

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Source: Alliance News

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