Forex News: Euro Falls After Eurozone PMI Data

Euro Falls After Eurozone PMI Data

(RTTNews) - The euro weakened against other major currencies in the European session on Thursday, as Eurozone business activity unexpectedly slipped into contraction in April as a result of rising energy prices and falling services demand. The ongoing closure of the critical Strait of Hormuz, also led to the downturn of the currency.

In a significant escalation of the Middle East conflict, Iran seized two cargo ships seeking to exit the Gulf via the vital global oil route and warned that the U.S. and Israel will not achieve their goals "through bullying."

Parliamentary Speaker Mohammad Bagher Ghalibaf said that there can be no full ceasefire between the two countries if the U.S. naval blockade on Iranian ports persists.

In economic news, the preliminary HCOB Composite PMI for the Eurozone surprisingly dropped to 48.6 in April, falling short of the forecast increase to 50.2 from 50.7 in March. While the Manufacturing PMI increased to 52.2 from 51.6, the Services PMI shrank more dramatically to 47.4 from a previous 50.2, compared to projections of 49.8.

Germany's private sector contracted for the first time in almost a year in April, reflecting the effects of the war in the Middle East, flash survey data from S&P Global revealed Thursday.

The composite output index dropped to a 16-month low of 48.3 in April from 51.9 in the previous month.

The index fell to sub-50 contraction zone for the first time since May last year. Moreover, the score was the lowest since December 2024.

In the European trading today, the euro fell to nearly a 4-week low of 0.8654 against the pound and nearly a 2-week low of 1.1679 against the U.S. dollar, from early highs of 0.8679 and 1.1714, respectively. If the euro extends its downtrend, it is likely to find support around 0.85 against the pound and 1.15 against the greenback.

Against the yen, the euro slipped to a 3-day low of 186.52 from an early high of 186.97. The euro may test support near the 184.00 region.

The euro slid to 0.9172 against the Swiss franc, from an early 3-day high of 0.9193. On the downside, 0.89 is seen as the next support level for the euro.

Looking ahead, Canada manufacturing sales data for March, PPI and raw materials prices for March and U.S. weekly jobless claims data, U.S. S&P Global PMI for April and U.S. Kansas Fed manufacturing index for April are due to be released in the New York session.

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