Euro Struggles on Disappointing Data

Euro is struggling today, once again lower as forex traders consider the state of the eurozone economy. Additionally, general risk aversion is also weighing on the euro as economic jitters set in and forex traders look for safe haven. EUR/USD is back below 1.3200, and EUR/GBP looks for direction.

Euro is taking a hit today, heading lower as economic data disappoints. One of the biggest factors in the lower euro, though, is the German PMI. German PMI indicated a shrinking manufacturing sector for the first time in 2012, and the news has many worried about the overall eurozone economy. Since Germany is the economic leader in the eurozone, slowing there would greatly impact the rest of the 17-nation currency region.
Additionally, euro is affected by news from elsewhere. In China, worries about a slowing growth continue. Chinese PMI was also disappointing, and this boosting risk aversion, since many had hoped that China would be able to help lead the global economy. But things aren’t looking up right now.
Euro is also feeling downward pressure from lower commodities. With gold and oil heading lower, the US dollar is well-supported right now, and that means that the euro has a tough road ahead — especially with the sovereign debt problems that many believe haven’t been solved.
At 14:38 GMT EUR/USD is down to 1.3155 from the open at 1.3214. EUR/GBP remains almost the same at 0.8328 as opposed to 0.8327 at the open. EUR/JPY has dropped to 109.0675 from the open at 110.1855.

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