Euro falls as data suggests Eurozone economy will grow just one per cent in 2019
The euro suffered today as economic data dealt a fresh blow to hopes for the Eurozone economy.
Read more: Eurozone construction sector bounces back in February after weak January
Germany and France’s manufacturing industries are contracting, a closely-followed index revealed, with both staying lower than the 50 measure representing growth.
Overall, both the Eurozone’s leading economies were still growing in April, with IHS Markit’s purchasing manager’s index (PMI) measuring Germany at 52.1 and France at 50.
The Eurozone itself scored a composite PMI of 51.3.
Chris Williamson, chief business economist at IHS Markit, said the figures “add to worries that the economy has failed to rebound with any conviction” after a poor end to 2018.
It “continues to show only very modest growth in the face of headwinds from slower global demand growth and subdued economic sentiment”, he added.
The euro fell almost half a per cent from 1.130 against the dollar to just 1.125 after the data came out.
Williamson aired fears that the Eurozone will fail to beat a very frail growth rate this year.
“The persistence of the business survey weakness raises questions over the economy’s ability to grow by more than 1% in 2019,” he said.
“Manufacturing remained the key area of concern, with output continuing to contract at one of the fastest rates seen over the past six years.”
David Cheetham, chief market analyst at online trader XTB, said: “Despite a couple of bright spots, the overall picture from the latest batch of industry surveys across the Eurozone isn't pretty, and this has caused both the single currency and stock markets on the continent to come under pressure.
“The service PMIs from France and Germany both topped estimates, but the Eurozone-wide figure was worse than expected and another disappointing manufacturing read from Germany will only serve to further heighten concerns of a global slowdown.”
Read more: Retail sales jump higher than expected in March
With German manufacturing seen as a proxy for global growth, its reading of 44.5 is “an ominous sign”, Cheetham added.
In contrast, a much largely than anticipated spike in retail sales for the UK did little to move sterling this morning, with Brexit the main market influencer at the moment, according to analysts.
Euro falls as data suggests Eurozone economy it will grow just one per cent in 2019