Euro Slips Noticeably After Weak PMI Reports

Forex News

The euro fell sharply against the US dollar after the release of weaker than expected data on activity in the manufacturing and the service sectors of the Eurozone and leading European countries. The EUR/USD pair fell by 0.54% to 1.1405 level.

The Eurozone composite output index, which measures the combined output of both the manufacturing and service sectors came in at a 25-month low of 52.7 from 54.1, compared to expectations for 53.9. The preliminary reading of the Markit manufacturing purchasing managers’ index (PMI) fell to a 26-month low of 52.1 in October from 53.2 in September. The services PMI slowed to a 24-month low of 53.3 in October from 54.7 a month earlier, compared to expectations for 54.5.

Meanwhile, economic data from Germany showed, that the preliminary German services purchasing managers’ index (PMI) declined to a five-month low of 53.6 in October, down from 55.9 in September. The indicator was below expectations for a reading of 55.5. German manufacturing PMI fell to 52.3 in October from a final reading of 53.7 in September. Analysts had expected the index to slip to 53.5. The indicator marked the lowest level in 29 months.

Flash German Composite Output Index, which measures the combined output of both the manufacturing and service sectors fell to a 41-month low of 52.7 this month, down from 55.0 in September. Economists had forecast a reading of 54.8.