With gauges of services output for Italy, Germany and the Eurozone declining unexpectedly in May, Eurozone year-on-year first quarter GDP contracting by slightly more than expected and retail sales in the currency bloc falling by more than hoped, the Euro modestly declined against its peers.
The Euro Exchange Rate was in the region of 0.8506 against the Pound as of 10:50 am GMT
Services PMI for Italy, Germany and the Eurozone fell to 46.5, 49.7 and 47.2 in May respectively.
However, composite PMI for the Eurozone came in at 47.7, in line with the initial flash reading.
In a statement accompanying the PMI data Markit’s Chief economist Chris Williamson noted: ‘The final PMI confirms the message from the earlier flash reading that the Eurozone remains gripped in the longest recession since the birth of the single currency, set to endure a seventh successive quarter of decline in the second quarter. The survey points to GDP falling by 0.2 per cent, similar to the decline seen in the first quarter.’
The doom and gloom went on to be interspersed with a more optimistic note: ‘Policymakers and politicians will nevertheless seek solace in the fact that the rate of decline has now eased for two consecutive months, and that Germany is stabilising. Downturns have also eased in France, Italy and especially Spain since earlier in the year.’
But the statement ended on a low: ‘However, the reality is that the region lacks any growth drivers, making it difficult to believe that anything better than a mere stabilization of economic activity remains unlikely for the foreseeable future’.
The Euro declined to 0.8502 against a broadly strengthening Pound (EUR/USD)
Retail sales in the currency bloc declined by 1.1 per cent in April from a year earlier, rather than the 0.8 per cent drop economists’ expected.
And although quarter-on-quarter GDP for the first three months of this year met estimates for contraction of 0.2 per cent, quarterly growth declined by 1.1 per cent from the same period of the previous year.
After the reports were published the Euro weakened against several of its most traded peers, although it continued to trade higher against a bearish Australian Dollar.
Over in the UK Sterling was supported by a positive services PMI report after the gauge of output advanced to 54.9 instead of rising to 53.1 as expected.
Current Euro (EUR) Exchange Rates
< Lower > Higher – Little Changed
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3063 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8505 <
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.3648 >
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6332 >
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7659 >
The Pound Sterling /Euro Exchange Rate is currently in the region of: 1.1758 >
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.7330 <
The New Zealand Dollar/Euro Exchange Rate is currently in the region of: 0.6127 <
(Correct as of 10:45 GMT)
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