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Forex - EUR/USD hits session lows on PMI data

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Investing.com - The euro fell to session lows against the dollar on Thursday after weak manufacturing data out of Germany and France underlined concerns over the economic outlook for the euro zone.

EUR/USD hit 1.2885 during European morning trade, the session low; the pair subsequently consolidated at1.2887, shedding 0.37%.

The pair was likely to find support at 1.2842, Tuesday's low and a four-month low and resistance at 1.2954, the session high.

Markit said that its preliminary German manufacturing purchasing managers' index fell to 48.9 in March from a final reading of 50.3 in February. Analysts had expected the index to tick up to 50.5.

A reading above 50.0 on the index indicates industry expansion, below indicates contraction.

Meanwhile, service sector activity in Germany expanded at the slowest rate in four months in March, with the services PMI falling to 51.6 from 54.7 in February.

The French manufacturing PMI came in at 43.9 in March, unchanged from February's reading.

Service sector activity in France fell to a 49-month low of 41.9 in March from a final reading of 43.7 in February.

The euro found support earlier after data showed that China's HSBC purchasing managers' index rose to 51.7 in March from 50.4 in February, indicating that the recovery in the world's second largest economy is still on track.

Elsewhere, negotiations aimed at finding an alternative solution on a bailout deal for Cyprus continued after the parliament rejected a controversial bank deposit tax in a vote on Tuesday.

The euro hit session lows against the pound and the yen, with EUR/JPY down 0.64% to 123.39 and EUR/GBP falling 0.58% to 0.8515.

The U.S. was to release the weekly government report on initial jobless claims, as well as industry data on existing home sales and official data on manufacturing activity in Philadelphia later Thursday.

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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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