Euro to US Dollar (EUR/USD) Exchange Rate softens as PMI data disappoints investors

The Euro has fallen against the US Dollar and softened against the majority of its major peers after data out of the Eurozone suggested that the region’s economic recovery slowed in February.

Data out of France caused particular concern as the Eurozone’s second largest economy saw contractions in both its manufacturing and service sectors. Markit which compiled the PMI reports said that the nation’s manufacturing index fell to a 2-month low of 48.5 and its services slumped to a nine-month low of 46.9. A figure below 50 indicates contraction. The weak data raised concerns that the country’s economy could see a contraction in the first quarter of 2014.

Elsewhere in the Eurozone Germany’s manufacturing PMI slowed to 54.7 from 56.5 in January, compared to expectations for a reading of 56.3. The country’s services however saw its PMI rose to 55.4 this month from 53.1 in January, ahead of forecasts for 53.4.

The wider Eurozone also recorded a slowdown in manufacturing but saw services improve.

“The big picture is one of a region that is recovering. It is not a spectacular recovery, but it is certainly moving in the right direction with a couple of expectations, notably France. The periphery has pulled out of its recession and Germany is positively surging,” said Chris Williamson, Markit’s chief economist.

The Euro could fall further later in the session if this afternoons US inflation, jobless claims and manufacturing PMI reports come in positively.