Euro Lower As Recession Concerns Grow After Weak Eurozone PMI Data

RTTNews · 06 Jul 2022 195 Views

The euro fell against its major rivals in the European session on Tuesday, as natural gas prices climbed and Eurozone business growth slowed sharply in June, intensifying worries about a recession.

Final survey results from S&P Global showed that the eurozone private sector expanded at a slower pace in June as the manufacturing production logged its first fall in two years on one side and the weaker growth in services activity on the other.

The final composite output index fell to 52.0 in June from 54.8 in the previous month. The reading was slightly above the initial estimate of 51.9.

The services Purchasing Managers' Index dropped to 53.0 in June from 56.1 in May. The flash score was 52.8.

European stocks and German bond yields declined on concerns about a possible recession. The yield on the 10-year bund dropped to 1.299 percent.

The euro depreciated to 1.0280 against the greenback for the first time since December 2002. On the downside, 1.00 is possibly seen as its next support level.

The euro weakened to near 3-week lows of 0.8543 against the pound and 139.55 against the yen, easing from its early high of 0.8623 and a 4-day high of 142.37, respectively. The euro is seen finding support around 0.84 against the pound and 136.00 against the yen.

The euro touched a 5-day low of 1.6708 against the kiwi and more than a 7-year low of 1.3295 against the loonie, following its prior highs of 1.3423 and 1.6832, respectively. The currency may face support near 1.66 against the kiwi and 1.31 against the loonie.

The euro declined to 0.9925 against the franc, its weakest level since January 2015. The next possible downside target for the currency is seen around the 0.97 level.

The euro remained lower against aussie, after hitting a 5-day low of 1.5130 at 9:30 pm ET. The pair had closed yesterday's deals at 1.5176.

Looking ahead, U.S. factory orders for May will be released in the New York session.

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