EUR/USD update (2nd July 2012, 14:00)

Visit Save For Later

by Market Moves Staff

Posted

The euro reversed some of its earlier losses following better-than-expected eurozone PMI.

The euro received a welcome boost this morning after eurozone manufacturing output contracted less than initially estimated. German manufacturing PMI eased to 45 in June from 45.2 in the previous month. The reading was better than the estimated reading of 44.7. Meanwhile, the eurozone PMI of 45.1 in June was unchanged from the prior month, exceeding consensus estimates of 44.8. The slowdown in the rates of contraction suggests we could be close to a potential turnaround in the manufacturing sector.

The euro was also supported by optimism over the deal reached at Friday’s EU summit. European leaders on Friday agreed for direct recapitalisation to stricken lenders, and also decided to use the EU rescue fund to stabilise bond markets. The ten-year Spanish government bond yield fell sharply to 6.26%, while the Italian ten-year government bond yield declined to 5.78% this morning.

The euro fell during the Asian trading session after China’s manufacturing activity contracted at its fastest pace in seven months. HSBC’s PMI fell to 48.2 in June, indicating that the shrinking demand for manufactured goods from Europe and North America was hurting the world’s biggest exporter. The official PMI also fell to a seven-month low, but in contrast to the HSBC PMI it showed an expansion at 50.2. China is one of Europe’s biggest trading partners and any slowdown in its activity affects European growth.

Like Like

Contribute to this Story:

All Forex News

Recent Forex News Articles

EUR/USD update (15th May 2013, 06:00)15 May 2013
The US dollar continued to edge higher against most of the majors as confidence mounts in the US economy’s recovery. Yesterday it was a spike in the small business index reading which showed that confidence is spilling over to the smaller players of the economy. An article running in the Fina...
EUR/USD update (14th May 2013, 12:00)14 May 2013
The currency cross continues to oscillate either side of this psychological level. Yesterday’s Eurogroup meeting failed to bring any real changes in the stated manifesto of tactics to help the region grow its way out of its current economic troubles. It was always unlikely that the 17 nations would...
EUR/USD update (14th May 2013, 06:00)14 May 2013
The US dollar continued to edge higher after retail sales came in much better than expected (+0.3% versus -0.1%). Data in the US is becoming a bit of a double-edged sword now as investors weigh the pros and cons of no QE. EUR/USD is sidelined at around $1.297 ahead of a fairly busy day on the...
EUR/USD update (13th May 2013, 13:00)13 May 2013
The euro is trading below the $1.3 mark, as traders are worried that the eurozone gross domestic product (GDP) report on Wednesday will be weak. The eurozone is in a recession and dealers are predicting that the region will be seen to have remained in a period of negative growth following Wednesday...
EUR/USD update (13th May 2013, 06:00)13 May 2013
Risk currencies struggled as the USD came back to life. EUR/USD is back below $1.30 and was relatively sidelined at $1.296 early in Asia. The fall in EUR/USD was partly due to German trade balance and Italian industrial production data missing expectations. Later today we have China data whic...
EUR/USD update (10th May 2013, 14:00)10 May 2013
The euro is lower against the US dollar so far today as weak economic releases from Germany and Italy drag on the currency. EUR/USD is trading at $1.3012, down 0.2%, after Germany revealed a smaller-than-expected trade surplus of €17.6 billion in March. Economists expected a trade surplus of €18 bi...
EUR/USD update (10th May 2013, 06:00)10 May 2013
US dollar strength was the main theme in global markets, as investors responded to further evidence that the US economy is back on track. Comments by Philly Fed Member Charles Plosser suggesting the Fed should seriously look at tapering off on asset purchases also helped fan the greenback. EUR/USD ...
EUR/USD update (9th May 2013, 12:30)9 May 2013
With both Germany and France closed for a bank holiday, it's been a particularly flat morning's trading in EUR/USD. Currency markets have had much to digest over the last week, with Poland, India, South Korea, Australia and the European Central Bank all cutting base rates this month. The long await...
EUR/USD update (9th May 2013, 06:00)9 May 2013
When ECB President Mario Draghi cut rates last week, he emphasised that the bank is ready to do more should economic data continue to deteriorate. As a result, the German data saw EUR/USD spike to $1.3195 before a slight pullback into the $1.3160 region. Later today we have the ECB monthly bu...

Recent Articles

EUR/USD update (17th May 2013, 12:00)17 May 2013
The euro is trading lower versus the US dollar following reports the US will cut back on quantitative easing (QE). The euro is trading at $1.2875, down a touch on the day after John Williams of the Federal Reserve Bank of San Francisco stated that the Fed will reduce the size of its stimulus packag...
Market Comment 17th May 201317 May 2013
European equities are set to open flat to marginally lower as the bulls take a short breather. Despite the woeful data from Europe and the US yesterday, markets managed to muster enough momentum and twist logic enough to eek out another day of gains. Despite the stark evidence that all is not...
EUR/USD update (17th May 2013, 06:00)1 second ago
It was a confusing night for the greenback, as US economic data disappointed and led to a USD sell-off. Unemployment claims, CPI, housing starts and the Philly Fed manufacturing index all came in worse than expected. However, this was short lived as another Fed member came out and suggested i...
Market Comment 16th May 201317 May 2013
European equities are set to open flat to marginally lower as the bulls take a short breather. Despite the woeful data from Europe and the US yesterday, markets managed to muster enough momentum and twist logic enough to eek out another day of gains. Despite the stark evidence that all is not...
Gold Price tumbles as Equity Markets rise17 May 2013
The price of gold has taken another tumble as equity markets steam ahead to new highs. Gold is trading at $1372, down 1.5% this morning, after US equities reached all-time highs last night. Historically, when traders have been worried about the global economy or the strength of the stock marke...
EUR/USD update (16th May 2013, 12:30)16 May 2013
After this morning’s EU consumer price index (CPI) figures, currency traders will be waiting to see how the US CPI figures come in. The EUR/USD currency cross looks set to retest the end of March lows of $1.2750, after a brief sojourn up to the $1.32 region. The overriding sentiment is that the US ...
EUR/USD update (16th May 2013, 06:00)16 May 2013
There were some mixed moves in the currency space overnight, but overall the US dollar managed to maintain its gains against the majors. It continued to edge higher, despite data suggesting the US economy isn’t quite where the Fed would want it to be before starting to taper off on asset purc...
EUR/USD update (15th May 2013, 12:30)15 May 2013
The euro is off against the US dollar after the eurozone economy is reported to have contracted for the sixth quarter in a row. The latest report from the eurozone shows us that the economy contracted by 0.2% for the first quarter of 2013 compared with 2012, making this the euro's sixth consecutive...
Market Comment 15th May 201315 May 2013
European equities look set to start on a positive footing as US markets take back the reins of sentiment. Despite weak economic data in Europe and the Feds Plosser calling for a tapering of bond purchases this summer, bullish momentum remained resilient and shrugged off any negative cues yest...