Euro Drops Against US Dollar on Mixed Eurozone Manufacturing PMIs

The euro today declined against the US dollar following the release of mixed manufacturing PMI data from across the euro area. The euro’s decline was further accelerated by renewed demand for the US dollar fueled by the risk-on investor sentiment.

The EUR/USD currency pair lost over 80 points to decline from a high of 1.2336 to trade at a low of 1.2253 at the time of writing.

The currency pair’s decline was triggered by the release of the Markit Italy Manufacturing PMI, which came in at 55.1 versus the expected 55.5. The Markit/BME Germany Manufacturing PMI also contributed to the pair’s decline by coming in at 58.2, which was lower than the consensus estimate and previous figure of 58.4. The positive Markit France Manufacturing PMI, which was recorded at 53.7 slightly higher than the expected 53.6, could not reverse the pair’s decline. Finally, the Markit Eurozone Manufacturing PMI for March remained at 56.6, which was 2 points lower than the February figure.

The German February retail sales data released by the Federal Statistical Office early in the European session had a muted impact on the currency pair despite missing expectations. Speeches from Federal Reserve board members Neel Kashkari and Lael Brainard also boosted the greenback.

The currency pair’s future performance is likely to be influenced by tomorrow’s Eurozone CPI data, the US factory orders, and the ISM Non-Manufacturing/Services Composite for March.

The EUR/USD currency pair was trading at 1.2267 as at 15:41 GMT having dropped from a high of 1.2336. The EUR/GBP currency pair was trading at 0.8718 having declined from a high of 0.8764.

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