Investing.com - The broadly weaker euro fell to a one-week low against the pound on Thursday, following disappointing manufacturing and service sector activity reports from the euro zone, while better-than-expected retail sales figures propped up sterling.
EUR/GBP hit 0.7990 during European morning trade, the pair’s lowest since September 13; the pair subsequently consolidated at 0.7997, shedding 0.57%.
The pair was likely to find short-term support at 0.7987, the low from September 13 and resistance at 0.8045, the session high.
Sentiment on the euro remained vulnerable after data showed that euro zone manufacturing activity improved modestly in September, but remained in contraction territory for the 13th consecutive month, while service sector activity slumped to the lowest level since July 2009.
The euro zone’s manufacturing purchasing managers’ index rose to a seasonally adjusted 46.0 in September from a final reading of 45.1 in August, compared to expectations for a reading of 44.5.
The services PMI fell to 46.0 from 47.2 in August. Analysts had expected the index to tick up to 47.4 in September.
Manufacturing activity in France tumbled unexpectedly in September, dropping to a three-and-a-half year low.
France’s manufacturing PMI fell to 42.6 in September from a final reading of 46.0 in September. Analysts had expected the index to come in at 46.4.
Service sector activity in France declined to a four-month low of 46.1 in September from a final reading of 49.2 in August.
The euro found brief support earlier after data showed manufacturing activity in Germany in September contracted at the slowest rate in six months, while service sector activity grew modestly.
Germany’s manufacturing PMI rose to 47.3 in September from a final reading of 44.7 in September. Analysts had expected the index to come in at 45.3.
Service sector activity in Germany increased to a four-month high of 50.6 in September from a final reading of 48.3 in August.
Also Thursday, Spain saw borrowing costs fall at an auction of ten-year government bonds on Thursday, amid ongoing uncertainty over whether Spain is about to ask for more financial aid, which would mean signing up to a permanent bailout fund.
Spain’s Treasury sold EUR859 billion worth of 10-year government bonds at an average yield of 5.66%, down from 6.64% at a similar auction last month.
Meanwhile, in the U.K., data showed that U.K. retail sales fell less-than-expected in August, indicating that the U.K. economy may not be as weak as feared.
The Office for National Statistics said U.K. retail sales fell by a seasonally adjusted 0.2% in August, compared to expectations for a 0.4% decline. Retail sales rose by 0.3% in July.
Retail sales rose at an annualized rate of 2.7% in August, in line with expectations, after rising at a rate of 2.3% in the preceding month.
Core retail sales, which exclude automobile sales, fell 0.3% last month, in line with expectations, after posting a flat reading in July.
Elsewhere, the euro was lower against the U.S. dollar and the yen, with EUR/USD down 0.82% to 1.2942 and EUR/JPY tumbling 1.15% to 101.10.
Later in the day, the U.S. was to release its weekly government report on initial jobless claims, as well as an index of manufacturing activity in Philadelphia.
EUR/GBP hit 0.7990 during European morning trade, the pair’s lowest since September 13; the pair subsequently consolidated at 0.7997, shedding 0.57%.
The pair was likely to find short-term support at 0.7987, the low from September 13 and resistance at 0.8045, the session high.
Sentiment on the euro remained vulnerable after data showed that euro zone manufacturing activity improved modestly in September, but remained in contraction territory for the 13th consecutive month, while service sector activity slumped to the lowest level since July 2009.
The euro zone’s manufacturing purchasing managers’ index rose to a seasonally adjusted 46.0 in September from a final reading of 45.1 in August, compared to expectations for a reading of 44.5.
The services PMI fell to 46.0 from 47.2 in August. Analysts had expected the index to tick up to 47.4 in September.
Manufacturing activity in France tumbled unexpectedly in September, dropping to a three-and-a-half year low.
France’s manufacturing PMI fell to 42.6 in September from a final reading of 46.0 in September. Analysts had expected the index to come in at 46.4.
Service sector activity in France declined to a four-month low of 46.1 in September from a final reading of 49.2 in August.
The euro found brief support earlier after data showed manufacturing activity in Germany in September contracted at the slowest rate in six months, while service sector activity grew modestly.
Germany’s manufacturing PMI rose to 47.3 in September from a final reading of 44.7 in September. Analysts had expected the index to come in at 45.3.
Service sector activity in Germany increased to a four-month high of 50.6 in September from a final reading of 48.3 in August.
Also Thursday, Spain saw borrowing costs fall at an auction of ten-year government bonds on Thursday, amid ongoing uncertainty over whether Spain is about to ask for more financial aid, which would mean signing up to a permanent bailout fund.
Spain’s Treasury sold EUR859 billion worth of 10-year government bonds at an average yield of 5.66%, down from 6.64% at a similar auction last month.
Meanwhile, in the U.K., data showed that U.K. retail sales fell less-than-expected in August, indicating that the U.K. economy may not be as weak as feared.
The Office for National Statistics said U.K. retail sales fell by a seasonally adjusted 0.2% in August, compared to expectations for a 0.4% decline. Retail sales rose by 0.3% in July.
Retail sales rose at an annualized rate of 2.7% in August, in line with expectations, after rising at a rate of 2.3% in the preceding month.
Core retail sales, which exclude automobile sales, fell 0.3% last month, in line with expectations, after posting a flat reading in July.
Elsewhere, the euro was lower against the U.S. dollar and the yen, with EUR/USD down 0.82% to 1.2942 and EUR/JPY tumbling 1.15% to 101.10.
Later in the day, the U.S. was to release its weekly government report on initial jobless claims, as well as an index of manufacturing activity in Philadelphia.