The euro declined against its major rivals in the European session on Thursday, as Eurozone business activity expanded at the weakest pace in more than a year in March and German business sentiment deteriorated, while European shares dropped ahead of U.S. President Donald Trump's tariff announcement aimed at China.
Flash data from IHS Markit showed that the composite output index dropped to 55.3 in March from 57.1 in February. The score signaled the weakest growth in the private sector since January 2017.
The reading was expected to ease moderately to 56.8.
Survey data from Ifo institute showed that German business climate index dropped to 114.7 from February's initially estimated 115.4. The score was forecast to fall to 114.6.
The current conditions index slid to 125.9, which was below the expected level of 125.6.
Traders weighed the impact of Trump's plan to impose tariffs against China worth upto $60 billion over intellectual-property violations. The move is likely to spark retaliation from Beijing and a trade war.
The currency held steady against its major rivals in the Asian session, with the exception of the yen.
The euro weakened to near a 2-month low of 0.8704 against the pound, from a high of 0.8742 hit at 3:45 am ET. The next possible support for the euro is seen around the 0.86 level.
Figures from the Office for National Statistics showed that U.K. retail sales rebounded at a faster than expected pace in February.
Retail sales volume grew 0.8 percent month-on-month in February, in contrast to a 0.2 percent drop in January. Sales were expected to grow moderately by 0.3 percent.
Following an 8-day high of 1.2388 hit at 3:30 am ET, the euro retreated to 1.2321 against the greenback. On the downside, 1.21 is seen as the next support level for the euro.
The single currency slipped to a 9-day low of 1.1676 against the Swiss franc, reversing from an early high of 1.1724. The euro is poised to test support around the 1.15 level.
The 19-nation currency reversed from an early high of 131.02 against the yen, falling to a 3-day low of 130.15. Further downtrend may see the euro challenging support around the 128.00 level.
Data from the Ministry of Economy, Trade and Industry showed that Japan's all industry activity decreased for the first time in four months in January, in line with expectations.
The all industry activity index fell 1.8 percent month-over-month in January, reversing a 0.6 percent rise in December.
The euro dropped to a 9-day low of 1.5844 against the loonie and a 3-day low of 1.7010 against the kiwi, off its early highs of 1.5956 and 1.7110, respectively. If the euro falls further, it may find support around 1.55 against the loonie and 1.67 against the kiwi.
On the flip side, the euro held steady against the aussie, after having advanced to 1.5975 at 12:45 am ET. The pair closed Wednesday's trading at 1.5887.
Data from the Australian Bureau of Statistics showed that Australia's jobless rate rose a seasonally adjusted 5.6 percent in February.
That was above expectations for 5.5 percent, which would have been unchanged from the January reading.
Looking ahead, at 8:00 am ET, the Bank of England's interest rate decision is scheduled for release. Economists widely expect the BoE to maintain interest rate at 0.50 percent and asset-purchase program at GBP 435 billion.
The U.S. weekly jobless claims for the week ended March 17, house price index for January, leading index for February and Markit's manufacturing PMI for March are scheduled for release in the New York session.
At 1:00 pm ET, the Bank of England Deputy Governor David Ramsden delivers closing remarks at the International FinTech Conference in London.
The Bank of Canada Deputy Governor Carolyn Wilkins speaks at the Rotman School of Management in Toronto at 3:00 pm ET.
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