Euro Lower As Eurozone Private Sector Growth Slows
August 21 2020 - 2:52AM
RTTF2
The euro drifted lower against its major counterparts in the
European session on Friday, as the euro area private sector grew at
a slower pace in August, signalling that the economic recovery was
undermined by rising virus cases and renewed restrictions to combat
the spread.
Flash survey data from IHS Markit showed that the composite
output index fell unexpectedly to 51.6 in August, while the score
was expected to remain unchanged at 54.9. Nonetheless, a score
above 50 indicates expansion.
The services Purchasing Managers' Index dropped
more-than-expected to 50.1 in August from 54.7 in July. The
expected level was 54.5.
The manufacturing PMI came in at 51.7 versus 51.8 a month ago.
The reading was forecast to rise to 52.9.
The euro depreciated to 0.8944 against the pound, its lowest
level in more than 5 weeks. The euro is poised to challenge support
around the 0.88 mark.
Data from the Office for National Statistics showed that UK
retail sales rose more-than-expected in July driven by non-food
store turnover.
Retail sales grew 3.6 percent month-on-month in July, but slower
than the sharp 13.9 percent rise in June and 12.2 percent increase
in May. Economists had forecast sales to rise 2 percent.
The euro hit a 10-day low of 124.54 against the yen and a 3-day
low of 1.0751 against the franc, down from Thursday's closing
values of 125.48 and 1.0765, respectively. The euro is likely to
face support around 119.5 against the yen and 1.05 against the
franc, if it falls again.
Breaking the key 1.18 level, the euro hit 1.1799 against the
greenback. This was the weakest level since August 14 and marked a
drop from a 2-day high of 1.1883 seen at 1:15 am ET. Next key
support for the euro is likely seen around the 1.16 level.
After an early rally to 1.6506 against the aussie and 1.5644
against the loonie, the euro weakened to a 2-day low of 1.6433 and
an 8-day low of 1.5580, respectively. Should the euro falls
further, it is likely to test support around 1.62 against the
aussie and 1.52 against the loonie.
The euro reversed from an early high of 1.8176 versus the kiwi,
with the pair trading at 1.8044. On the downside, support is seen
near the 1.76 level.
Looking ahead, Canada retail sales for June and new housing
price index for July, as well as U.S. existing home sales the same
month will be featured in the New York session.
At 10.00 am ET, European Commission is slated to issue Eurozone
flash consumer confidence survey results for August.
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