Forexpros – The euro gave up early gains against the U.S. dollar on Thursday, slumping to a three-day low after official data showed that German manufacturing activity dropped to a four-month low, while manufacturing in France also contracted.
EUR/USD hit 1.3152 during early European trade, the pair’s lowest since March 19; the pair subsequently consolidated at 1.3165, shedding 0.39%.
The pair was likely to find support at 1.3048, the low of March 16 and resistance at 1.3253, the session high.
The preliminary German manufacturing purchasing managers’ index fell to 48.1 in March from a final reading of 50.2 last month, confounding expectations for an increase to 51.1
A reading above 50.0 on the index indicates industry expansion, below indicates contraction.
The report showed that service sector activity in Germany slumped to a four-month low in March.
A separate report showed that France’s manufacturing PMI fell to 47.6 in March from a final reading of 50.0 the previous month, and against expectations for a modest increase to 50.5.
The French services PMI remained unchanged at 50.0, disappointing expectations for an increase to 50.6.
Earlier Thursday, preliminary data showed that China’s HSBC manufacturing PMI fell to 48.1 in March, from a final reading of 49.6 the previous month, as new orders dropped to their lowest level since November.
The data underlined concerns over a possible slowdown in growth in the world’s second largest economy.
The euro was lower against the pound, with EUR/GBP dropping 0.25% to hit 0.8305 and fell sharply against the yen, with EUR/JPY tumbling 0.83% to hit 109.32.
Later in the day, the euro zone was to release manufacturing and service sector activity for the whole region, as well as data on industrial production, while the U.S. was to publish official data on initial jobless claims.
In addition, European Central Bank President Mario Draghi and Federal Reserve Chairman Ben Bernanke were to speak at public engagements.
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