Euro Falls As Eurozone PMI Drops To 16-month Low

The euro weakened against the other major currencies in the European session on Monday, after data showed that the Eurozone private sector growth weakened to a 16-month low in May.

Data from Markit showed that the Eurozone flash composite output index fell unexpectedly to 52.9 in May, 16-month low, from 53 in April. It was forecast to rise to 53.2.

The manufacturing PMI dropped to 51.5 in May from 51.7 in the prior month. Economists had forecast the score to improve to 51.9.

The services Purchasing Managers' Index held steady at 53.1, while it was expected to rise to 53.3.

In other economic news, data from Markit also showed that Germany's composite output index rose to a 5-month high of 54.7 in May from 53.6 in April. The flash services Purchasing Managers' Index improved to 55.2 from 54.5 a month ago. It was also above the expected reading of 54.6.

The manufacturing PMI came in at 52.4 in May, a 5-month high, and up from 51.8 in the previous month. The expected score was 52.

In the Asian trading, the euro held steady against its major rivals.

In the European trading, the euro fell to a 1-week low of 122.75 against the yen, from an early high of 123.64. The euro is likely to find support around the 121.00 area.

Against the U.S. dollar and the pound, the euro dropped to 1.1200 and 0.7705 from early 5-day highs of 1.1243 and 0.7754, respectively. If the euro extends its downtrend, it is likely to find support 1.11 around against the greenback and 0.75 against the pound.

The euro edged down to 1.1102 against the Swiss franc, from an early high of 1.1124. On the downside, 1.10 is seen as the next support level for the euro.

The euro fell to nearly a 3-week low of 1.6474 against the NZ dollar, from an early high of 1.6588. The euro may test support near the 1.62 area.

Against the Canadian dollar, the euro edged down to 1.4702 from an early high of 1.4756. The next possible downside target level for the euro is seen around the 1.44 area. Meanwhile, the euro rose to a 4-day high of 1.5558 against the Australian dollar, from an early low of 1.5476 and held steady thereafter.

Looking ahead, at 6:15 am ET, Federal Reserve Bank of St. Louis President James Bullard speaks about the US economy and monetary policy at the Official Monetary and Financial Institution Forum in Beijing.

San Francisco Fed President John Williams will give a presentation on evolving challenges and approaches to monetary policy and their implications for fiscal policies targeted at enhancing long-run growth, before the Council on Foreign Relations in New York at 9:00 am ET.

Markit's U.S. flash manufacturing PMI for May is to be released at 9:45 am ET.

At 10:00 am ET, Eurozone flash consumer sentiment index for May is due.