Currencies: More Dismal Data Released From Eurozone
The euro was hit again by more dismal economic data this morning. A one-two combo from a couple of the eurozone's largest economies sent the single currency tumbling back down from the one-week highs it had set overnight against the dollar.
The euro traded recently for $0.8516, below yesterday's close of $0.8539. The euro was near break-even against the yen when it closed yesterday, having slipped back from earlier gains. The euro was lately trading for 102.67 yen per euro; it closed yesterday at 102.69 yen per euro.
The dollar gained slightly against the yen in the tumult, this morning posting a price of 120.61 yen per dollar, a small step up from yesterday's close of 120.25 yen.
Market focus shifted back to the eurozone's continuing economic slowdown after Germany's
purchasing managers' index
, which came out this morning, fell below the key psychological level of 50 in May. On top of that, the German business activity survey, also released this morning, slipped to an index point of 49.8 in May, down from 51.5 in April. A level below 50 signals a contraction in business activity.
The follow-up shot came from France, where data this morning showed that the French services sector fell to a record low in productivity during May.
All that new data just adds to a long list of previous weak economic data from the eurozone. And it all came out just a day ahead of the
European Central Bank's
next scheduled meeting. Analysts expect the ECB to leave key interest rates unchanged tomorrow due to concerns about inflation, but the bank might try to prepare the markets for a rate cut in the coming weeks. The ECB has lowered interest rates only once this year, cutting the prime rate by 25 basis points in a surprise move on May 10.
The
Bank of England
met today and, as expected, left the U.K.'s key rate unchanged at 5.25%. The British pound took a hit since yesterday's close, mainly ahead of the BOE's decision, dropping only slightly afterward. The pound was recently trading for $1.4019, down more than a full penny from yesterday's close of $1.4133.
Meanwhile, the U.S. buck slipped in value against the other members of the dollar bloc. The Australian dollar was lately climbing to $0.5140 from $0.5098 at last close. The U.S. dollar took a small spill to C$1.5280 this morning, after having closed trading Tuesday at C$1.5308.
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