Euro Slides Amid Weak Eurozone, German PMI Data
Canbera-Australia (Oct 1) The euro weakened against most major currencies in the early European session on Wednesday after data showed that Germany's manufacturing activity contracted and Eurozone PMI fell to a 14-month low in September.
Data from Markit Economics showed that the eurozone manufacturing Purchasing Managers' Index fell more than intially estimated to a 14-month low of 50.3 from August's reading 50.7. The reading was below the earlier flash estimate of 50.5.
The German manufacturing contracted in September, ending a 14-month sequence of continuous growth. The Markit /BME manufacturing PMI fell to 49.9 from 51.4 in August. The flash estimate was 50.3.
The French manufacturing sector contracted at a slower pace as estimated in September. The PMI came in at 48.8, in line with flash estimate, up from 46.9 in August.
Traders are likely to remain cautious ahead of a rate decision by the European Central Bank on Thursday.
The slowdown in euro zone inflation on Tuesday intensified hopes for more stimulus from the European Central Bank .
Traders remain split about what ECB President Mario Draghi is set to announce. Some expect that he could speak about the the plans to buy government bonds in a Federal Reserve-style quantitative easing package.
In the Asian trading, the euro was higher against the other major currencies.
The euro fell to 1.2584 against the US dollar in the European session, from an early high of 1.2631. If the euro extends its downtrend, it is likely to find support around the 1.256 area.
The euro, which closed yesterday's deals at 138.39 against the yen, edged down to 138.22. This may be compared to an early high of 138.79. The euro may test support near the 137.62 region.
Data from Markit Economics showed that Japan's manufacturing sector slowed in September but continued to expand, with a PMI score of 51.7. That was unrevised from the flash estimate earlier this month, although it was down from 52.2 in August.
Pulling away from an early high of 1.2063 against the Swiss franc, the euro edged down to 1.2052. On the downside, 1.204 is seen as the next support level for the euro.
Against the kiwi, the euro fell to a 2-day low of 1.6136 from an early high of 1.6246. At yesterday's close, the euro was trading at 1.6168 against the kiwi. The euro is likely to find support around the 1.60 area.
Pulling away from an early high of 1.4156 against the Canadian dollar, the euro edged down to 1.4108. At yesterday's close, the euro was trading at 1.4137 against the loonie. The euro may test support around the 1.40 area.
The euro retreated to 1.4436 against the Australian dollar, from an early high of 1.4600. Continuation of downtrend may lead the euro to a support around the 1.43 mark.
Looking ahead, US ADP non-farm employment report and Markit's final manufacturing PMI for September are due to be released in the new York session.
Source: RTTnews
