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Euro Slides After Eurozone Factory Growth Lowest Since 2016

CANBERA (Alliance News) - The euro drifted lower against its major opponents in the European ...

Alliance News 2 January, 2019 | 11:00AM
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CANBERA (Alliance News) - The euro drifted lower against its major opponents in the European session on Wednesday, after a data showed that Eurozone's private sector growth slowed in December to the lowest level since February 2016.

Survey data from IHS Markit showed that the final Eurozone manufacturing PMI fell to 51.4 from 51.8 in November. The score came in line with the flash estimate.

In accordance with the latest trend, underlying the slowdown in overall growth was further softness in new orders, the survey showed.

Separate data showed that German manufacturing activity expanded in December at the slowest pace since March 2016.

The final manufacturing PMI slipped to 51.5 in December from 51.8 in November. The reading matched the flash estimate.

Sentiment deteriorated as disappointing manufacturing data from China added to investor concerns over slowing global growth.

A private survey showed that China's manufacturing sector contracted for the first time in 19 months in December, due to ongoing trade frictions between the world's two largest economies. The Caixin/Markit manufacturing PMI dropped to 49.7 from 50.2 in November.

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

The euro depreciated to 124.49 against the Japanese yen, a level unseen since June 2017. The euro is seen finding support around the 122.00 level.

Following an advance to near a 2-month high of 1.1497 against the greenback at 1:10 am ET, the euro reversed direction and fell to 1.1429. The euro is poised to find support around the 1.13 mark.

The single currency declined to a 5-day low of 1.1226 against the franc, from a high of 1.1271 hit at 2:00 am ET. The euro is likely to test support around the 1.10 mark.

After rising to near a 2-month high of 1.7116 against the kiwi at 2:10 am ET, the euro retreated with pair trading at 1.7038. If the euro declines further, 1.68 is possibly seen as its next support level.

The euro was trading lower at 1.5570 against the loonie, down from a 5-day high of 1.5635 touched at 1:30 am ET. Next key support for the euro is possibly seen around the 1.53 region.

The common currency pulled down to 1.6282 against the aussie, from near a 3-month high of 1.6342 hit at 2:10 am ET. On the downside, 1.61 is likely seen as the next support level for the euro.

On the flip side, the euro was firmer at 0.9014 against the pound, after having dropped to 0.8983 at 12:15 am ET. Further uptrend may take the euro to a resistance around the 0.92 region.

Looking ahead, US advance goods trade balance and wholesale inventories for November and Markit's final manufacturing PMI for December are scheduled for release in the New York session.

Copyright RTT News/dpa-AFX

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