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Forex News: Euro Falls As Eurozone Manufacturing Contracts To 7-year

Euro Falls As Eurozone Manufacturing Contracts To 7-year Low

08/01/2019 - 06:37:00 (RTTNews)

(RTTNews) - The euro declined against its major counterparts in the European session on Thursday, as a data showed that the euro area manufacturing sector contracted the most since the end of 2012 in July.

Final data from IHS Markit showed that the manufacturing Purchasing Managers' Index fell to 46.5 in July from 47.6 in June. The score signaled the sharpest deterioration in operating conditions since December 2012.

The reading was also below the neutral 50-mark for the sixth consecutive month. Nonetheless, the score was slightly above the flash reading of 46.4.

Separate data showed that Germany's manufacturing sector moved deeper into the contraction zone in July. The Markit/BME factory PMI fell to 43.2 from 45.0 in June.

The currency traded mixed against its major rivals in the Asian session. While it held steady against the pound and the franc, it fell against the greenback. Against the yen, it rose.

The euro declined to weekly lows of 1.0982 against the franc and 1.4582 against the loonie, from its early highs of 1.1019 and 1.4619, respectively. The currency is likely to find support around 1.08 against the franc and 1.44 against the loonie.

Reversing from its early highs of 1.6911 against the kiwi and 1.6189 against the aussie, the euro fell to a 2-day low of 1.6807 and a 3-day low of 1.6109, respectively. The next possible support levels for the euro are seen around 1.65 against the kiwi and 1.59 against the aussie.

The European currency slid to more than a 2-year low of 1.1032 against the greenback, from a high of 1.1081 hit at 5:00 pm ET. If the euro declines further, it may find support around the 1.09 level.

The euro edged lower to 120.38 against the yen, after rising to 120.71 at 8:30 pm ET. On the downside, 118.00 is possibly seen as the next support level for the euro.

On the flip side, the euro rose to against the pound, from a low of 0.9100 seen at 2:30 am ET. The euro is seen finding resistance around the 0.93 level.

Survey data from IHS Markit showed that the UK manufacturing sector shrank at the fastest pace in almost six-and-a-half years in July.

The factory Purchasing Managers' Index remained unchanged at 48.0 in July, while the score was forecast to fall to 47.6. The last time the PMI was below its current level was almost six-and-a-half years ago.

Looking ahead, the Bank of England's interest rate decision is slated for release at 7:00 am ET. Economists widely expect the central bank to maintain rate at 0.75 percent and asset purchases at GBP 435 billion.

In the New York session, U.S. weekly jobless claims for the week ended July 27, ISM manufacturing index for July and construction spending for June will be featured.

For comments and feedback: contact editorial@rttnews.com

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