Euro Drops As Eurozone Manufacturing Activity Slows
Frankfurt (June 2) The European currency weakened against the other major currencies in the early European session on Monday as data showed that Eurozone manufacturing activity slowed more-than-estimated in May.
The recovery in the Eurozone manufacturing sector was slower than initially estimated in May, final data from Markit Economics showed.
The final seasonally adjusted Markit manufacturing Purchasing Manager's Index fell to 52.2 from 53.4 in April. The flash estimate for May was 52.5.
The easing signaled by the headline PMI reflected slower rates of expansion in production, new orders and employment. Meanwhile, Germany's manufacturing PMI for May fell to 52.3, from 54.1 in April. That missed out the estimate of 52.9. A survey showed German manufacturing PMI has slowed down to a 7-month low .
The euro fell to a 5-day low of 0.8115 against the pound and a 4-day low of 1.3593 against the US dollar, from early highs of 0.8133 and 1.3637, respectively. The euro closed last week's deals at 0.8137 against the pound and 1.3634 against the greenback. If the euro extends its slide, it may possibly find support around 1.34 against the greenback and 0.80 against the pound.
Against the Canadian dollar, the euro slipped to 1.4759, from an early high of 1.4772. The pair closed last week's deals at 1.4789. The next possible downside target for the euro is seen at 1.46.
The euro dropped to 138.68 against the yen, from an early multi-day high of 139.13. Last week's closing quote of the euro-yen pair was at 138.75. The euro is likely to find support around the 137.81 area.
Against the Australian and NZ dollars, the euro eased to 1.4689 and 1.6049, from early multi-day highs of 1.4737 and 1.6099, respectively. The euro closed Friday's deals at 1.4644 against the aussie and 1.6046 against the kiwi. If the euro extends its slide, it may possibly find support around 1.45 against the aussie and 1.58 against the kiwi.
Looking ahead, ECB Supervisory Board Chair Daniele Nouy is scheduled to speak at 7:45 am ET in Munich .
German preliminary CPI for May is set for release at 8:00 am ET .
At 8:40am ET , US Treasury Secretary Jacob Lew will deliver remarks at a symposium co-hosted by the Treasury Department and the Center for Strategic and International Studies in Washington, D.C.
Markit's final US manufacturing PMI for May, US construction spending for April and ISM manufacturing for May are slated for release in the New York session.
