News Column

Euro Mixed After Eurozone Manufacturing PMI

September 1, 2014

BRUSSELS (Alliance News) - The euro showed mixed trading against its major rivals in the early European session on Monday after data showed that the Eurozone manufacturing sector growth eased to its lowest level in the current 14-month growth sequence in August.

Data from Markit Economics showed that Eurozone manufacturing Purchasing Managers' Index fell to 50.7 in August from 51.8 in July. It was the lowest score since July last year and was below its earlier estimate of 50.8.

Traders focus on the European Central Bank policy meeting due on Thursday, after the ECB president Mario Dragi commented on potential further easing measures in the Jackson Hole annual summit.

In the Asian session, the euro dropped against most major currencies as Ukraine crisis flared up again.

Ukrainian President Petro Poroshenko warned a "full-scale war" was imminent if Russian troops continued an advance in support of pro-Moscow rebels, as Europe and the US threatened Russia that they will impose tougher sanctions on Moscow.

The euro recovered to 1.3138 against the US dollar, from an early 1-year low of 1.3118. If the euro extends its uptrend, it is likely to find resistance around the 1.32 area.

Against the yen, the euro edged up to 136.85 from an early low of 136.65. On the upside, 137.31 is seen as the next resistance level for the euro.

Data from the Markit Economics showed that the manufacturing sector in Japan expanded at an accelerated pace in August, with a purchasing managers' index score of 52.2. That missed forecasts for 52.4, although it's up significantly from 50.5 in July.

Moving away from an early high of 0.7916 against the pound, the euro depreciated to nearly a 6-week low of 0.7890. Continuation of bearish trend may lead the euro to a support around the 0.787 mark.

Data from the Bank of England showed that UK mortgage approvals declined in July after recording a strong increase in June. The number of mortgages approved in July totaled 66,569 compared to 67,085 in June. It was forecast to fall to 66,000.

Against the Swiss franc, the euro edged up to 4-day high of 1.2069 in the earlier deals, and held steady thereafter.

The US markets are closed in observance of Labor day holiday.

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Source: Alliance News

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