Euro (EUR) Exchange Rate: ‘Single Currency’ Weakened by Mixed PMI Data
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At the start of the session the Euro was buoyed by the release of a report from France which showed that manufacturing activity rebounded higher in March and expanded by its fastest pace in 33-months, easing some of the concerns over the economic outlook for the Eurozone’s second largest economy.
The French manufacturing PMI rose to a seasonally adjusted figure of 51.9 in March, beating economist predictions for a figure of 49.8. The data means that the French manufacturing sector returned to growth as a figure above 50 indicates expansion whereas one below indicates contraction.
The Euro’s gains were reversed as the morning progressed due to the publication of weaker than forecast PMI data out of Germany and the wider Eurozone.
The data showed that manufacturing activity in Germany, the Eurozone region’s largest economy expanded at its slowest pace in four months, putting a dampener of hopes for the region’s economic recovery and cast doubt over the strength of the German economy.
The manufacturing PMI came in at 53.8, below the 54.6 forecast by economists. The nation’s services PMI also disappointed by coming in at 54, below the 55.5 figure expected.
The PMI reports for the wider Euro region also came in below expectations.
The Euro could remain under pressure for the rest of the session due to renewed tensions over the situation in Ukraine. Russian troops seized control of several Ukrainian military bases and shots were reportedly fired.
There was also negative news for the French government as the National Front made gains in local elections.