Euro Falls On Soft PMI Data

The euro weakened against other major currencies in the European session on Friday, as investor sentiment weighed on weak business activity data from the region.

Data from S&P Global showed that the euro area private sector recovery suffered a setback in June as business activity and employment growth softened due to weak orders. The flash HCOB composite output index fell unexpectedly to 50.8 in June from 52.2 in May. The score was below forecast of 52.5.

The flash services Purchasing Managers' Index fell to a three-month low of 52.6 from 53.2 in May. The score was forecast to rise to 53.5.

At 45.6, the manufacturing PMI fell to a six-month low from 47.3 in the previous month. The reading was expected to rise to 48.0.

Germany's composite output index posted 50.6 in June, down from 52.4 in May and was lower than the forecasted 52.7. The score fell from a 12-month high signaling a noticeable slowdown in the rate of growth.

The services PMI fell to 53.5 in June from 54.2 in the previous month and was lower than the expected 54.4. Likewise, the manufacturing PMI dropped to 43.4 from 45.4. The reading was forecast to rise to 46.4.

France's private sector contracted on renewed decrease in new orders. The headline HCOB flash composite output index fell unexpectedly to 48.2 in June from 48.9 in May. The score was seen at 49.5.

The flash services PMI posted 48.8, down from 49.3 in the prior month. The reading was expected to rise to 50.0. The manufacturing PMI slid to 45.3 from 46.4 in April. The expected reading was 46.8.

In the European trading today, the euro fell to 0.8443 against the pound, from an early 9-day high of 0.8467. The EUR/GBP pair may find support near the 0.82 region.

In economic news, the official data showed that the U.K. retail sales volume grew 2.9 percent on a monthly basis in May, offsetting the 1.8 percent fall in April.

Also, British consumer sentiment index advanced to -14 in May from -17 in April, monthly survey data from the market research group GfK showed.

Against the Swiss franc, the euro dropped to 0.9506 from an early high of 0.9560. The EUR/CHF is likely to find support near the 0.93 level.

Moving away from an early near 3-week high of 170.45 against the yen, the euro slipped to a 2-day low of 169.33. On the downside, EUR/JPY is likely to find its support around the 167.00 level.

Against the U.S., Australia, the New Zealand and the Canadian dollars, the euro slid to a 1-week low of 1.0671, a 1-year low of 1.6046, a 4-day low of 1.7435 and nearly a 2-month low of 1.4614, respectively. If the euro extends its downtrend, it is likely to find support around 1.05 against the greenback, 1.59 against the aussie, 1.73 against the kiwi and 1.43 against the loonie.

Looking ahead, Canada retail sales data for April, raw material prices for May, U.S. S&P Global flash manufacturing PMI for June, U.S. Consumer Board's leading index for May, U.S. existing homes sales for May and U.S. EIA baker Hughes oil rig count data are slated for release in the New York session.