Euro Falls As German PMI Hits Two-month Low
July 24 2015 - 05:14AM
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The euro weakened against the other major currencies in the
early European session on Friday, after data showed that Germany's
manufacturing PMI fell to a two-month low in July.
Data from Markit Economics showed that Germany's manufacturing
PMI dropped to 51.5 in July, while it was expected to remain
unchanged at 51.9. The flash composite output index fell to 53.4 in
July from 53.7 in June.
The services Purchasing Managers' Index came in at 53.7, down
from 53.8 in June. It was forecast to rise to 54.
Separate data showed that Eurozone manufacturing PMI fell to
52.2 from 52.5 in June. Economists had forecast the indicator to
remain unchanged at 52.5. The PMI for the service sector dropped
more-than-expected to 53.8 in July from 54.4 in June. The expected
score was 54.2.
The composite Purchasing Managers' Index fell to 53.7 in July
from June's four-year high of 54.2.
Meanwhile, the European shares also traded lower, following
disappointing results from industrial bellwethers and lingering
U.S. rate hike worries amid signs of a strengthening labor
market.
FOMC members will meet to discuss a rate decision on Wednesday
after Federal Reserve Chair Janet Yellen reinforced expectations
for a rate hike during her two-day testimony before Congress last
week. While it looks increasingly unlikely that the Fed would hike
rates next week, investors remain apprehensive about the Fed taking
a more hawkish turn.
Regarding Greece, officials from the European Commission, the
European Central Bank and the International Monetary Fund will meet
in Athens today to start detailed discussions with the Greek
government on a new bailout deal.
In the Asian session today, the euro held steady against its
major rivals.
In the early European trading now, the euro fell to 0.7064
against the pound and 1.0511 against the Swiss franc, from early
highs of 0.7091 and 1.0548, respectively. If the euro extends its
downtrend, it is likely to find support around 0.69 against the
pound and 1.04 against the franc.
Against the U.S. dollar and the yen, the euro dropped to 1.0935
and 135.52 from early highs of 1.0994 and 136.27, respectively. On
the downside, 1.08 against the greenback and 134.00 against the yen
are seen as next support levels for the euro.
The euro edged down to 1.4253 against the Canadian dollar, from
an early high of 1.4326. The euro is likely to find support around
the 1.40 area.
Against the Australian dollar, the euro slipped slightly to
1.4975 from an early high of 7-month high of 1.5087. The euro is
likely to find support around the 1.46 area.
Meanwhile, the euro rose to an 8-day high of 1.6711 against the
NZ dollar earlier and held steady thereafter.
Looking ahead, U.S. new home sales for June and flash Markit
manufacturing PMI for July are slated for release in the New York
session.
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