Euro Drops Against Yen and Dollar


By TraderVox.com

Tradervox (Dublin) – Shaky Eurozone PMI has caused the euro to decline against the safe haven currencies. The PMI result came in below the 50 boom-bust value indicating contraction in the market. The euro declined against the yen and the dollar after the manufacturing and services index contracted more than forecasted for the month of March. This has boosted demand for the safe haven currencies hence increasing the value of the yen and the dollar against the euro.

The Japanese currency advanced against all the major currencies after the release of the report showing a decline in the manufacturing index in China. Many economists have raised concerns about the state of the global economy following the report. South pacific dollars were the worst affected by this report declining to their lowest in two months. The two largest economies in the euro region registered unexpected declines in the industrial index forcing the Stoxx Europe 600 index to drop for the fourth day.

The euro declined against the yen as reports from Japan indicate that the economy is better off. Economist and analysts are keeping a keen eye on the 82.85/65 support zone for the USDJPY pair as they try to establish signs of retracement. After the China report and the eurozone PMI reports, the Australian dollar slid by 0.8 percent as the New Zealand dollar declined by 0.9 percent to settle at $1.0377 and 80.85 cents respectively.

Steve Barrow, a Standard Bank Plc Analysts in London, indicated that the report from the euro region is a big blow to the improvements that have been made over the last few months concerning the euro zone crisis. He said that the reality of the euro-zone economic improvement “myth” has dawned on the investors causing a decrease in risk appetite.

The euro declined by 1.1 percent against the yen to settle at 108.98 at the beginning of the New York session and also dropped against the dollar declining 0.4 percent to sell at 1.3159. The yen increased against the dollar by 0.7 percent to sell at 82.83 yen per dollar.

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