Posted on May 2, 2012 by Trading Point Investment Research Desk at 11:36 am GMT
Euro tumbled across the board after a large sell-off following poor euro zone economic data that showed a manufacturing downturn in April and a rise in unemployment. The region’s final April manufacturing PMI came in lower than expected at 45.9, which is the lowest since June 2009. Unemployment in the euro zone rose to 10.9 percent versus a previous 10.8 percent.
EURUSD broke below the key 1.32 level and accelerated its fall to 1.3129, down over 100 pips on the day. The firmer dollar also weighed the euro, due to the contrast in PMI between European and the U.S. numbers. On Tuesday the U.S. posted a higher than expected PMI number showing expansion in the manufacturing sector.
GBPUSD opened in Europe at 1.6222 and slid to a low of 1.6175 despite the strong UK construction PMI data. Sterling gained against the euro, rising to a 22-month high, on the back of contrasting euro zone and UK PMI data. EURUSD fell to 0.8111, the lowest since June 2010.
USDCHF surged higher to 0.9150 helped by the dollar’s bounce on surprisingly improved manufacturing data. The dollar is up by over 1 percent since yesterday’s one-month low against the Swiss franc.
EURJPY fell to a two-week low as euro was pressured across the board by worsening factory activity in the euro zone. The pair fell to 105.41 from an early high of 106.53.
USDJPY also fell as yen gained strength on safe haven demand, bringing the pair to a low of 80.25 from 80.60. Dollar direction now depends on upcoming US jobs data due in the North American trading session today. The private ADP employment report is forecast to show a drop in jobs created, with a fall to 177,000 in April from a previous 209,000.
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