The Euro has weakened against the Pound and the majority of its peers as the latest Markit PMI data for the region showed that the contraction in the Eurozone’s business activity accelerated for a second consecutive month.
The data shows that with the exception of a marginal increase in January of last year, business activity has fallen continually since September 2011. Manufacturing output fell in March at the fastest rate since December 2012, whilst business activity in the service sector suffered the steepest decline since October 2012.
Companies also reported that new business levels fell at the strongest rate for three months, dropping at the fastest rates since December and September in manufacturing and services respectively.
Employment also continues to fall after signs that it is set to fall for a fifteenth successive month, The rate of job losses eased slightly for the second month in a row, and was broadly in line with the average seen throughout last year. Rates of job losses eased in both manufacturing and services.
In France, output across both manufacturing and services contracted at the fastest rate since March 2009. Meanwhile in Germany output rose for the fourth successive month, albeit at the weakest pace since December.
France’s preliminary PMI fell to 42.1 from 43.1. Any figure below 50 means contraction.
Commenting on the flash PMI data, Chris Williamson, Chief Economist at Markit said: “The flash PMI data suggest that the Eurozone business environment deteriorated at a quickening rate in March. While the data are consistent with the pace of economic decline easing in the first quarter from the 0.6% contraction seen in the final quarter of last year – perhaps showing a 0.3% decline – the concern is that the downturn has gathered pace again.
“Instead of the Eurozone economy stabilising in the second quarter, as many – including the ECB – have been hoping to see, the downturn could therefore intensify in coming months. “The deteriorating situation in Cyprus also raises the prospect of business and consumer confidence falling further across the single currency area, and possibly dragging the PMI numbers down further in April.
“France saw the steepest downturn in business activity since March 2009, rounding off the worst quarter for four years, while Germany looks set to have enjoyed reasonable if unspectacular growth. However, even Germany showed worrying signs of growth fading in March, driven by a return to contraction of its manufacturing sector.”
As of 11:25 am
The Euro to Pound Sterling exchange rate is currently trading in the region of 0.8496
The Euro to US Dollar exchange rate is currently trading in the region of 1.2912
The Euro to Australian Dollar exchange rate is currently trading in the region of 1.2395
The Euro to New Zealand Dollar exchange rate is currently trading in the region of 1.5504