FONT-SIZE Plus   Neg

Euro Weakens Against Most Majors As Equities Slump On China PMI Miss

The euro fell against majority of its key counterparts on Thursday as European markets are trading in negative territory after a gauge of China's manufacturing activity declined in December.

In economic news, Eurozone's manufacturing sector growth picked up further in December, as estimated in the flash report published last month, detailed results of a survey by Markit Economics showed today. The report, however, failed to inspire the euro.

The headline purchasing managers' index rose for the third month running to post 52.7 in December. The reading was unchanged from the flash reading and was higher than November's score of 51.6.

The PMI has now signaled expansion throughout the second half of the year. For the final quarter as a whole, the sector is recording its best performance in two-and-a-half years, Markit said.

Elsewhere, German employment reached another record high in 2013, but the rise in employment was only about half of the average of 2011 and 2012, a report published by Destatis said today. An average of 41.78 million were employed in 2013, up 232,000 or 0.6 percent from the previous year.

Employment hit a record for the seventh month in a row and the number of unemployed people decreased slightly by an average of 36,000 to just under 2.3 million in 2013 compared with the previous year. The jobless rate fell to 5.2 percent in 2013, which was lower than in almost all other EMU member countries.

Elsewhere, U.K.'s manufacturing recovery remained on track at the end of 2013, survey data from Markit Economics revealed today. However, the Markit/Chartered Institute of Purchasing & Supply Purchasing Manager's Index fell to 57.3 in December from November's 33-month high of 58.1. The November score was revised from 58.4. A reading above 50 indicates expansion.

The euro slipped back to below the 1.37 level against the US dollar after a gap of 6-days, falling to a weekly low of 1.3669 around 7:05 am ET. On the downside, the euro-greenback pair may test support around the 1.3625/30 area.

The common currency eased to 144.11 against the yen, pulling back from last week's fresh 5-year high of 145.68. The next likely downside target for the pair is seen around the 142.90/143.0 area, which was a resistance in the last week and likely to be turned a support now.

The single currency slipped to nearly a monthly low of 0.8270 against the pound, retreating from a trend-line resistance of a descending channel. The next probable support would be its trend-line support around the 0.82 area.

On the flip-side, the European shared unit strengthened to a monthly high of 1.2321 against the Swiss franc due to across the board weakening of the latter. If the euro-franc pair extends uptrend, 1.2335 is seen as the next probable resistance level in the near-term.

Looking ahead, the U.S. weekly jobless claims for the week ended December 28th, manufacturing PMI for December, construction spending for November and the ISM manufacturing survey results for December would garner market attention in the upcoming New York session.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Forex News

comments powered by Disqus
Follow RTT