Euro Weakens As German, Eurozone Manufacturing Surveys Fall Again

Date : 05/23/2019 @ 1:57PM
Source : RTTF2
Stock : Euro vs Pound Sterling (EURGBP)
Quote : 0.86196  -0.002735 (-0.32%) @ 9:26PM
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Euro Weakens As German, Eurozone Manufacturing Surveys Fall Again

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The euro declined against its major counterparts in the early European session on Thursday, as flash manufacturing and services PMI reports from Germany and euro area missed estimates in May, while German business sentiment worsened, adding to worries about a slowdown in the currency bloc.

Survey results from the Ifo Institute showed that Germany's business confidence weakened for a second straight month and at a faster-than-expected pace in May.

The Ifo business confidence index fell to 97.9 from 99.2 in April. Economists had forecast a score of 99.1.

Survey data from IHS Markit showed Eurozone flash manufacturing Purchasing Managers' Index slid to 47.7 from 47.9 in April. The score was forecast to rise to 48.1.

Likewise, the services PMI came in at 52.5 in May, down from 52.8 in the previous month. Economists had forecast a score of 53.0.

Separate data showed that German manufacturing PMI fell unexpectedly to 44.3 from 44.4 in April. The expected score was 44.8.

At the same time, the services PMI dropped to a 4-month low of 55.0 from 55.7 in the previous month. The reading was forecast to fall moderately to 55.4.

European elections kicked off today, with investors concerned about the rising popularity of anti-European parties in several countries.

The elections will run till Sunday.

Polling began in U.K. and Netherlands today, followed by Ireland and Czech Republic on Friday.

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

The euro depreciated to 1.1131 against the greenback, its weakest since April 26. If the euro drops further, 1.09 is possibly seen as its next support level.

The euro that ended Wednesday's trading at 1.1256 against the Swiss franc dropped to a 1-1/2-month low of 1.1235. The euro is likely to test support around the 1.11 region.

The euro fell to a 3-day low of 122.62 against the yen, from a high of 123.08 hit at 6:45 pm ET. The euro is seen finding support around the 121.00 region.

Survey from Nikkei showed that Japan manufacturing PMI fell in May, posting a manufacturing PMI score of 49.6.

That's down from 50.2 in April and it falls beneath the boom-or-bust line if 50 that separates expansion from contraction.

The single currency pulled back to 1.6201 against the aussie and 1.7153 against the kiwi, from its early high of 1.6238 and near a 5-month high 1.7196, respectively. Next key support for the euro is seen around 1.60 against the aussie and 1.70 against the kiwi.

On the flip side, the euro appreciated to 0.8838 against the pound, up from Wednesday's closing value of 0.8802. The euro is poised to test support around the 0.89 mark.

The 19-nation currency held steady against the loonie, after having advanced to a 2-day high of 1.5000 at 2:45 am ET. The pair was valued at 1.4979 when it ended deals on Wednesday.

Looking ahead, the European Central Bank will release minutes from the April 9-10 meeting at 7:30 am ET.

In the New York session, Canada wholesale sales for March, U.S. weekly jobless claims for the week ended May 18 and new home sales for April are scheduled for release.

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