Forex Market Update: Euro Falls against the Dollar
The euro edged lower against the U.S. dollar on Thursday as unexpectedly weak economic data both from the euro zone and Europe’s biggest economy, Germany, fanned fears that the monetary union was not yet out of the woods.
While business activities in the euro zone contracted more-than-expected in March, the Composite PMI in Germany and France fell in the same period. The unexpectedly weak economic indicators show that the currency bloc is in the midst of economic slowdown or even contraction.
In addition, simmering concerns over banking sector collapse in Cyprus and possible danger of contagion spreading to other vulnerable economies of the euro zone, weighed on the euro. The European Central Bank warned Cyprus to reach a bailout deal with Brussels within next 4 days or else face cut out in financial aid, has deepened the crisis.
All these factors kept pressure on the euro.
On Thursday, the euro sagged as low as $1.2879, hovering around its four-month low of $1.28435 hit on Tuesday, before recovering some of the lost ground to trade at $1.2915, which was still lower for the session. The euro also slumped to a five-week low against the pound Sterling and plunged more than 1% against the yen.
“Today’s data adds to the argument that loose policy will be needed to stay in place. We expect the euro to head lower,” said Chris Walker, currency strategist at Barclays, according to Reuters.
According to Reuters, currency analysts believe that near term support will center around the 200-day moving average of $1.28775.
More Posts by this author
- Boeing to Lay off 800 Employees by the Year End (BA)
- Micron’s Gross Margin Improves, Q2 Revenue Beat Estimate, Shares Rally (MU)
- Stocks End Sharply Higher
- Gold Prices Edge Lower as Cyprus Bailout Concerns Eased; Silver Prices Fall Sharply
- U.S. Stocks Steady, European Stocks Shed Losses to Turn Higher
- Forex Market Update: Cyprus Bailout Crisis, German Economic Data Put Pressure on Euro
- U.S. Stocks Edge Higher as Cyprus Bailout Concerns Ease
 |
Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.
|
