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Forex - Euro comes off lows vs. dollar after PMI’s

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Investing.com -

Investing.com - The euro backed off eight month lows against the dollar on Thursday after private sector euro zone surveys beat expectations, but gains were held in check amid concerns that fresh sanctions on Russia would act as a drag on growth.

EUR/USD edged up 0.07% to 1.3471, from around 1.3438 ahead of the data, the weakest since November 21.

The euro found support after a report showed that the preliminary reading of the euro zone manufacturing purchasing managers' index rose to a two-month high of 51.9 this month.

The bloc's services PMI jumped to a 38-month high of 54.4.

Private sector activity in Germany also expanded in July, with the country's services PMI jumping to a 37 month high. The French service sector also expanded this month, but the contraction in the country's manufacturing sector deepened.

The euro failed to build on gains amid fears that fresh economic sanction on Russia would have a negative impact on the outlook for growth in the currency bloc, which has close trade ties to Moscow.

Elsewhere, the dollar was almost unchanged against the yen and the traditional safe haven Swiss franc, with USD/JPY inching up 0.06% to 101.54 and USD/CHF dipping 0.05% to 0.9016.

Sterling fell to one month lows, with GBP/USD slipping 0.18% to 1.7011. The drop in the pound came after data showed that U.K. retail sales rose just 0.1% in June, falling short of expectations for a 0.3% increase.

Still, retail sales rose 4.5% on a year-over-year basis in the three months to June. It was the fastest quarterly increase in 10 years, the ONS said, indicating that the U.K.'s consumer driven recovery is continuing.

The New Zealand dollar was sharply lower, with NZD/USD down 0.94% to 0.8590. The kiwi dropped after the Reserve Bank raised interest rates to 3.5% from 3.25% on Thursday but indicated that rates would remain on hold for the rest of the year.

AUD/USD dipped 0.10% to 0.9448, while USD/CAD eased 0.07% to 1.0721.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was at close to six-week highs at 80.85.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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