Posted On: August 09, 2012
The euro fell to a more than two-year low against the dollar on Tuesday as weak euro zone data and a dimmer outlook for the region's strongest economies from Moody's further clouded the prospects for the common
Germany's purchasing managers index showed both the manufacturing and services sector shrinking more than expected in July. The equivalent French manufacturing survey was also well below forecasts.
In the United States, manufacturing expanded at its slowest pace since late 2010, hobbled by weak overseas demand.
The data came a day after Moody's revised its outlook for Germany, the Netherlands and Luxembourg to negative, warning that Europe's top-rated countries may have to increase support for indebted states such as Spain and Italy.
"The continuing deluge of negative euro-related news has restrained the single currency's upside potential, leaving it vulnerable to further depreciation," Ravi Bharadwaj, pricing and market analyst at Western Union Business Solutions in Washington.
It doesn't help, he added, that "euro zone public officials have persistently acted like deer in the headlights when facing the region's extraordinary credit strains."
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