The euro traded lower against the US dollar on Thursday after reports revealed that Germany’s manufacturing sector slowed more than expected in February.
The 18-bloc currency fell 0.27% lower at $1.37 against the US dollar at the time of writing, after the euro opened around $1.3730.
The manufacturing sector for the eurozone’s strongest economy came in lower than expected in February, compared to the 32-month high recorded in the previous month. Germany’s services sector picked up from a three-month low at a faster pace, according to reports released by Markit Economics on Thursday.
The preliminary manufacturing Purchasing Managers’ Index (PMI) dropped to 54.7 in February, sliding from January’s final reading of 56.5, while analysts forecasted a reading of 56.3.
Germany’s services sector came in higher than expected in February and expanded for the ninth consecutive month.
The flash services PMI climbed to 55.4, picking up from the previous reading of 53.1 seen in January and above analysts forecast of 53.4.
A reading above 50.0 in both the services and manufacturing sector indicates an expansion, while a reading below 50.0 signifies contraction.
On Wednesday, the official minutes from the Federal Open Market Committee (FOMC) January meeting were released and revealed that Fed members backed the decision to reduce the central bank’s monthly bond purchases by another $10 billion to $65 billion a month.
The minutes suggested that the FOMC policymakers decided to modify their commitment to keep their benchmark interest rate near zero as the unemployment rate approaches its 6.5% target.
The news did not have an effect on the greenback; however the dollar slightly picked up from its seven-week low after the FOMC minutes release.
The next Federal Open Market Committee meeting is scheduled for March 18-19.
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