Euro Ekes Out Some Small Gains After Disappointing PMI

Euro is eking out some small gains against some of its counterparts following the disappointing PMI report just out for June. Concerns about a faltering eurozone economy are on the rise again, especially with the data indicating that France is struggling.

The latest PMI data from Markit indicates that the eurozone continues to expand at a slower rate. The PMI for the eurozone is at 52.8, when forecasts were for 53.5. Even though the measure is above 50, which indicates expansion, the fact that the number keeps dropping is concerning, and could mean that contraction is on the way.
Especial concern is had for France, which continues to show some contraction. France’s PMI number for June is 48.0, representing a drop from May’s 49.3. France is the second-largest economy in the eurozone. While the 18-nation currency region doesn’t rely as heavily on France as it does on Germany, it’s still an important part of euro support, and it takes some of the pressure off Germany to be such a big support.
For now, the euro is managing to show some small gains, but weakness is likely ahead.
At 12:44 GMT EUR/USD is up to 1.3596 from the open at 1.3590. EUR/GBP is up to 0.7995 from the open at 0.7987. EUR/JPY is down to 138.5115 from the open at 138.7650.

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