Investing.com - The euro extended losses against the U.S. dollar on Wednesday, after data showed that service sector activity in the euro zone contracted at a slightly faster rate than initially estimated in August, fuelling fears that the bloc is entering a recession.
EUR/USD hit 1.2502 during European morning trade, the pair’s lowest since August 31; the pair subsequently consolidated at 1.2506, shedding 0.48%.
The pair was likely to find support at 1.2362, the low of July 4 and resistance at 1.2567, the session high.
Markit said that its revised euro zone services purchasing managers’ index fell to 47.2 in August from a preliminary reading of 47.5.
Analysts had expected the index to remain unchanged.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
Germany's services sector contracted at its fastest rate in three years, with the PMI coming in at 48.3.
Commenting on the report, Rob Dobson, Senior Economist at Markit said, “The final August PMI came in only slightly below its earlier flash estimate, leaving the euro zone economy on course to fall back into technical recession in the third quarter.”
Demand for the single currency was also hit by growing doubts over whether the European Central Bank will announce more details of measures to help stabilize the region’s sovereign debt markets after its policy meeting on Thursday.
The euro was also lower against the pound and the yen, with EUR/GBP down 0.27% to 0.7896 and EUR/JPY dropping 0.54% to 98.02.
Later Wednesday, the U.S. was to release revised data on nonfarm productivity, while the euro zone was to produce official data on retail sales.
EUR/USD hit 1.2502 during European morning trade, the pair’s lowest since August 31; the pair subsequently consolidated at 1.2506, shedding 0.48%.
The pair was likely to find support at 1.2362, the low of July 4 and resistance at 1.2567, the session high.
Markit said that its revised euro zone services purchasing managers’ index fell to 47.2 in August from a preliminary reading of 47.5.
Analysts had expected the index to remain unchanged.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
Germany's services sector contracted at its fastest rate in three years, with the PMI coming in at 48.3.
Commenting on the report, Rob Dobson, Senior Economist at Markit said, “The final August PMI came in only slightly below its earlier flash estimate, leaving the euro zone economy on course to fall back into technical recession in the third quarter.”
Demand for the single currency was also hit by growing doubts over whether the European Central Bank will announce more details of measures to help stabilize the region’s sovereign debt markets after its policy meeting on Thursday.
The euro was also lower against the pound and the yen, with EUR/GBP down 0.27% to 0.7896 and EUR/JPY dropping 0.54% to 98.02.
Later Wednesday, the U.S. was to release revised data on nonfarm productivity, while the euro zone was to produce official data on retail sales.