Forexpros – The euro was lower against most of its major counterparts on Wednesday, following data showing that manufacturing activity in the euro zone fell to its lowest level since July 2009 while concerns over France’s triple A credit rating also weighed.
During European morning trade, the euro was down against the U.S. dollar, with EUR/USD shedding 0.39% to hit 1.3451.
Preliminary data released earlier showed that the euro zone’s manufacturing purchasing managers’ index slumped to a 28-month low November, falling to 46.4, down from 47.1 in October.
Manufacturing output in Germany dropped to a 28-month low of 47.9, underlining fears that the euro zone could be slipping into a recession.
Service sector activity in the euro zone improved slightly, but remained in contraction territory for the third consecutive month in November.
The shared currency came under pressure earlier amid speculation that France’s triple A credit rating might be in danger after a Belgian newspaper report that Belgium and France were in fresh talks over an existing bailout plan for troubled lender Dexia.
The report sparked concerns that France could have to play a larger role in the rescue.
The euro was also lower against the pound, with EUR/GBP slipping 0.10% to hit 0.8631.
The minutes of the Bank of England’s November policy meeting released earlier, showed that policymakers saw little merit in “fine tuning” their stimulus program and voted unanimously to maintain the central bank’s key interest rate at 0.5% and the size of its asset purchase program at GBP275 billion.
In addition, the single currency was weaker against the yen and the Swiss franc, with EUR/JPY slipping 0.29% to hit 103.63 and EUR/CHF dropping 0.19% to hit 1.2322.
Safe haven demand was boosted earlier after data showed that China’s November HSBC preliminary manufacturing PMI fell to a 32-month low, adding to fears over a ‘hard landing’ in the world’s second largest economy.
Elsewhere, the euro was mixed against the Canadian, Australian and New Zealand dollars, with EUR/CAD dipping 0.06% to hit 1.4013, EUR/AUD rising 0.39% to hit 1.3784 and EUR/NZD inching up 0.06% to hit 1.8080.
Later in the day, the U.S. was to publish a string of economic data ahead of Thursday’s Thanksgiving holiday, including a government report on durable goods orders, the weekly report on initial jobless claims as well as data on crude oil stockpiles, inflation, personal income and personal spending.
Meanwhile, the University of Michigan was to release revised data on inflation expectations and consumer sentiment.
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