Euro Weakens on Manufacturing Contraction, Falling Consumer Confidence

Jun 22,2019 01:25   Source:Earnforex

10 and 20 eurocent coins and 10 and 20 euro notesThe euro is tumbling against its major currency rivals at the end of the trading week, driven by disappointing manufacturing activity numbers for June and an underconfident consumer. The euro has been having a tough week, especially after President Donald Trump targeted the central bank for sending the euro lower by hinting at additional monetary stimulus to support the eurozone economy.

The IHS Markit Eurozone Manufacturing Purchasing Managers’ Index (PMI) clocked in at 47.8 in June, up slightly from last month’s 47.7 reading. The market had expected the index to reach 48. This represents the fifth consecutive month of contraction in factory activity, led by a drop in output and new orders.

Other details in the PMI found that export orders slipped at a softer pace, job creation climbed just a bit, and input cost inflation was at a near three-year low. Overall, the manufacturing sentiment fell due to worries about sliding demand and the trade war disrupting international commerce.

The IHS Markit Composite PMI came in at 52.1 this month, up from 51.8 in May. The IHS Markit Services PMI was also up at 53.4 in June, a jump from 52.9 last month.

According to new data from the European Commission, consumer confidence continues to sit in subzero territory. The consumer confidence indicator in the eurozone tumbled again by 0.7 points to -7.2 in June, down from -6.5 in May. The market had penciled in a reading of -6.5.

The euro has fallen against many of its currency pairs this week after ECB president Mario Draghi said that he was prepared to cut interest rates and relaunch quantitative easing to spur growth and support equity markets. After his remarks at a central banking forum in Portugal made headlines, the euro plunged against the US dollar, prompting a seething President Trump to take to Twitter to lambast Draghi.

Mario Draghi just announced more stimulus could come, which immediately dropped the Euro against the Dollar, making it unfairly easier for them to compete against the USA. They have been getting away with this for years, along with China and others.

The EUR/USD currency pair rose 0.08% to 1.1302, from an opening of 1.1292, at 10:50 GMT on Friday. The EUR/GBP surged 0.42% to 0.8926, from an opening of 0.8893.


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