Forex - EUR/JPY drops on weak European manufacturing data

Published 05/02/2012, 09:59 PM
Updated 05/02/2012, 10:00 PM
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Investing.com - The euro fell against the yen on Thursday after sluggish manufacturing data hit the wire in Europe that sparked sentiments ECB officials may consider stimulus measures to stabilize the economy.

In Asian trading on Thursday, EUR/JPY hit 105.36, down 0.09%, up from a low of 105.32 and off a high of 105.49.

The pair sought to test support at 105.14, the low of May 2, and resistance at 106.54, the high of May 2.

Europe continues to fray investors nerves worldwide.

In Europe, a eurozone manufacturing purchasing managers’ index fell to a 34-month low of 45.9 in April, missing estimates for 46.0.

Factory output in Europe's largest economy, Germany, was off as well, with its manufacturing PMI dropping to 46.2 in April from 46.3 in March and below market estimates for 46.4.

The numbers sparked sentiments that European Central Bank officials at a meeting on Thursday will consider rolling out easing measures to jolt the economy, which would weaken the euro.

Such market talk sparked demand for safe-haven currencies, including the yen.

Weak U.S. jobs figures failed to rattle nerves at least for very long.

In the U.S., payroll processer ADP said that private-sector, non-farm employment rose by 119,000 jobs in April, the lowest gain since last September, down from a 201,000 rise in March.

Analysts were hoping to see a figure around 177,000 in April.

The disappointing ADP report in the U.S. did not convince investors the Fed would consider hinting at easing any time soon, which sparked demand for the greenback and a sell-off among many major currencies save the yen, itself a safe-haven currency.

The euro, meanwhile, was down against the pound and down against the Canadian dollar, with EUR/GBP down 0.02% at 0.8120 and EUR/CAD down 0.13% and trading at 1.2962.

Later Thursday, all eyes will be on the European Central Bank and press conference afterwards.







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