The Euro has broadly declined this morning after several pieces of disappointing data fanned fears regarding the Eurozone’s economic outlook.
The Euro Exchange Rate was in the region of 1.2910 against the US Dollar as of 10:12 am GMT
While the uncertainty regarding the situation in Cyprus continues, separate reports by Markit Economics have shown Eurozone and German flash PMI for manufacturing and services dropping this month.
German manufacturing slid from 50.3 in February to 48.9 in March, a three-month low, While manufacturing in the Eurozone as a whole also fell to a three-month low, dropping from 47.9 to 46.6.
Eurozone services PMI sank to a five month low.
The following statement was issued with the German report: ‘Germany looks set for a return to growth over the first quarter of 2013, but there are risks that the recovery will have subsided appreciably by the time GDP data arrives to herald an upturn at the start of the year. Moreover, the loss of output growth momentum over the month in March was the greatest since the PMI surveys flagged up a rapid slowdown around the middle of 2011.’
Chris Williamson, Markit’s chief economist, had this to say of the Eurozone results: ‘The flash PMI data suggest that the Eurozone business environment deteriorated at a quickening rate in March. […] Instead of the Eurozone economy stabilising in the second quarter, as many – including the ECB – have been hoping to see, the downturn could therefore intensify in coming months.’
Williamson added: ‘The deteriorating situation in Cyprus also raises the prospect of business and consumer confidence falling further across the single currency area, and possibly dragging the PMI numbers down further in April.’
After the reports were released the Euro fell close to a fresh four-month low against the US Dollar and posted notable declines against the majority of its other currency rivals, including the Japanese Yen and British Pound.
As one senior currency strategist asserted: ‘The weak economic data is hitting the Euro, sentiment is very fragile. Germany is one of the locomotives of Eurozone growth, so people are likely to become a little more cautious. The Euro is likely to remain under
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