TheÂ euro weakened toÂ aÂ five-week low against theÂ US dollar atÂ theÂ end ofÂ theÂ trading week onÂ theÂ latest eurozone economic data that is indicating lackluster growth. Despite aÂ rallying DAX andÂ FTSE, theÂ currency could not record any gains, adding toÂ its string ofÂ losses over theÂ last month.
According toÂ Eurostat, theÂ official European statistics office, retail sales inÂ theÂ eurozone rose 0.3% inÂ June forÂ aÂ 1.2% annual boost. This is lower than theÂ 0.4% andÂ 1.4% theÂ market had initially anticipated. Consumers increased their purchases ofÂ food, beverages, tobacco, andÂ online goods, but they bought fewer clothing andÂ footwear items. Also, retail sales saw their biggest gains inÂ Germany andÂ Spain andÂ their sharpest decreases inÂ Estonia, Finland, andÂ Portugal.
TheÂ eurozone experienced sluggish business growth toÂ kick off theÂ third quarter. IHS Markitâs Eurozone Composite Final Purchasing Managersâ Index (PMI) tumbled toÂ 54.3 inÂ July, down from 54.9 inÂ June â anything above 50 shows growth.
AÂ sub-index that measures new orders also slipped toÂ its second lowest level over theÂ last 12 months ofÂ 54.1. Businesses are not optimistic forÂ theÂ future asÂ theÂ future output index slumped toÂ 63.1, aÂ 20-month low.
There was another warning sign: theÂ headcount increased atÂ aÂ weaker pace inÂ June.
Rob Dobson, aÂ director atÂ IHS Markit, told Reuters:
TheÂ final PMI numbers confirm theÂ euro area economy started quarter three onÂ aÂ softer footing.
TheÂ outlook seems toÂ be turning into aÂ straight choice between theÂ upturn being sustained atÂ its current subdued pace orÂ rising headwinds reining inÂ growth further during theÂ months ahead. OnÂ this front, downside risks are more prevalent.
Last week, theÂ European Central Bank (ECB) left its monetary policy asÂ is, but policymakers are projecting that it will begin toÂ tighten policy andÂ raise interest rates next year. TheÂ Bank ofÂ England (BOE) announced aÂ rate hike onÂ Wednesday, bringing rates toÂ 0.75%, their highest levels since theÂ 2009 recession.
TheÂ EUR/USD currency pair slid 0.03% toÂ 1.1583, from anÂ opening ofÂ 1.587, atÂ 14:03 GMT onÂ Friday. TheÂ EUR/GBP currency pair rose 0.04% toÂ 0.8906, from anÂ opening ofÂ 0.8908.
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