Euro Drops As Eurozone Business Activity Slows Sharply
The euro declined against its major counterparts in the European
session on Thursday, as Eurozone business growth slowed sharply to
a 16-month low in June as demand stalled and price pressures
The latest survey from S&P Global showed that the flash
composite output index fell to a 16-month low of 51.9 in June from
54.8 in May. Economists had expected a score of 54.
The services purchasing managers' index dropped to a 5-month low
of 52.8 in June from 56.1 in May. The score was forecast to ease to
The manufacturing PMI fell to a 22-month low of 52.0 in June
from 54.6 in May. Economists had expected the reading to drop to
Separate surveys showed that business activity in Germany and
France eased in June, fuelling worries about the bloc's growth
German bond yields fell, with the yield on the 10-year bund
reaching 1.466 percent.
The weak data prompted money markets to lower expectations on
rate hikes from the European Central Bank.
The euro edged down to 1.0483 against the greenback and 1.3607
against the loonie, following its early highs of 1.0581 and 1.3710,
respectively. If the euro falls further, it may challenge support
around 1.03 against the greenback and 1.34 against the loonie.
The euro retreated to 1.5231 against the aussie and 1.6749
against the kiwi, after hitting near a 4-month high of 1.5345 and a
new 4-month high of 1.6891, respectively in the previous session.
The euro is likely to find support around 1.49 against the aussie
and 1.62 against the kiwi.
The euro touched a 2-day low of 141.88 against the yen, falling
from a high of 143.99 seen at 8:50 pm ET. On the downside, 137.00
is possibly seen as its next support level.
The euro pulled back from an 8-day high of 0.8641 against the
pound and slipped to 0.8595 after the data. Against the franc, it
remained lower at 1.0144. The euro is seen finding support around
0.84 against the pound and 1.00 against the franc.
Looking ahead, Canada manufacturing and wholesale sales for May,
U.S. weekly jobless claims for the week ended June 18 and S&P
Global's services PMI for June will be released in the New York
At 10 am ET, Federal Reserve Chair Jerome Powell will testify on
the semi-annual monetary policy report before the House Financial
Services Committee in Washington DC.
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