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Euro Slips Below $1.30

ByBenzinga
AuthorBenzinga
Published 09/03/2013, 10:32 AM
Updated 05/14/2017, 06:45 AM

The euro continued its slide against the dollar on Tuesday after weak unemployment data from the 17 nation bloc and worries about US military intervention in Syria put pressure on the currency.

The euro traded at $1.2936 in the early hours of Tuesday despite new PMI data that suggested the region's recovery would continue into the third quarter.

Growth in the eurozone's factory activity continued in August, PMI data from Markit showed. According to the data provider, the eurozone's overall reading rose to 51.4 from 50.3 in July. The data reassured policy makers and investors in the region that the region's recovery was on track, as its upward climb suggested that progress was being made.

Even more promising were the individual PMI scores for bailout countries. According to The Wall Street Journal, factory activity in Spain grew for the first time in over two years. PMI scores also showed improvement in Italy, Ireland, Germany, the Netherlands and Austria. In Greece, the figures showed a decline in factory activity growth, but at the slowest pace in three years. France was the only dark spot in the data; the country's factory activity retreated.

Although PMI data gave hope to the eurozone's budding recovery, most still see a long road ahead for the currency bloc. The region's governments are expected to continue with belt tightening policies in order to shrink their debt, which in turn will discourage businesses and households from spending.

At the European Central Bank meeting this week, policy makers are expected to keep the region's interest rate low at 0.5 percent. Over the summer, ECB President Mario Draghi pledged to keep interest rates low for an extended period in order to help the region gain momentum.

BY Laura Brodbeck

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