The euro is hovering around six-week lows against the dollar following disappointing economic reports today.
Euro zone preliminary Purchasing Managers’ Index (PMI) data suggest that growth in the region is contracting in the fourth quarter.
The Flash Markit Eurozone Manufacturing PMI gave a reading of 47.8. The index which is used as a barometer for growth, ticked up to 47.2 in November from October’s 28-month low of 46.5, but this is the third straight month the index is below 50. Any number below 50 indicates contraction, and above 50 indicates expansion.
As factory output is hovering at the lowest levels since 2009, fears are growing that the euro zone is dangerously close to heading in to a recession.
While the bloc’s dominant service sector contracted less than expected this month it is also below the expansion phase remaining below the index’s 50 point demarcation line between contraction and expansion. The Flash Markit Eurozone Services PMI, which tracks business activity at thousands of firms across the 17-nation bloc, rose to 47.8 this month from October’s 46.4, beating expectations for 46.5.