The euro that moved sideways in Asian deals on Thursday declined against most major currencies during early European trading amid various disappointing economic reports.
Data from a survey by Markit economics and CDAF showed that the seasonally adjusted purchasing managers' index (PMI) for the French manufacturing sector dropped to a 36-month low of 44.4 in May from 46.9 in April. Economists were looking for a reading of 47.
Germany's seasonally adjusted purchasing managers' index for the manufacturing sector dropped to 45 in May from 46.2 in April. Economists were looking for a reading of 47 in May.
Eurozone economic activity fell to a near three-year low in May, marking the fastest rate of contraction since June 2009. The composite output index dropped more than expected to 45.9 from 46.7 in April. The expected reading was 46.6. Output has fallen eight times in the past nine months.
Meanwhile, latest survey results from Ifo Institute showed that Germany's business confidence declined more than expected in May. The Ifo business climate index fell to 106.9 in May from 109.9 in April. Reports said that this was the first fall since October last year. Economists had forecast the index to drop to 109.4.
The euro that ended Wednesday's trading at 1.2584 against the US dollar fell to a fresh 22-month low of 1.2517 in early European deals. If the euro-dollar pair weakens further, it will break 1.25 level and target the 1.233 level.
Against the Japanese yen, the euro slipped to 99.39, its lowest level since February 01. On the downside, 99.0 is seen as the next target level for the European currency. At yesterday's close, the euro-yen pair was quoted at 100.02.
The euro hit as low as 0.8003 against the pound, compared to yesterday's close of 8022. The next downside target level for the euro-pound pair is seen at 0.795.
European leaders have voiced their strong desire for Greece to remain in the eurozone and honor its commitments under previously agreed bailout deals that require the implementation of reforms and unpopular austerity measures, European Council President Herman Van Rompuy said late Wednesday.
Rompuy made the remarks during a press conference held after an informal summit of European leaders in Brussels to discuss ways for boosting growth in Europe. The summit also discussed plans to ensure stability in the 17-member eurozone in wake of the ongoing sovereign debt crises being faced by several member-states of the single currency bloc, including Greece.
Investors now turn toward the New York session, in which the U.S. durable goods orders for April and the weekly jobless claims for the week ended May 19 are slated for release.
by RTT Staff Writer
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