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• Eurozone June flash PMIs paint a sober picture of the European economy
• The common currency tumbles as the manufacturing sector’s contraction continues
• Economic activity in the services sector declined in June

Disappointing Eurozone data sends the euro lower across the dashboard. Earlier today, the Eurozone manufacturing and services PMIs were released, and both came out worse than expected.

The weakness in the manufacturing sector is worrying. The market expected the PMI to come at 44.8, but the economic activity in the sector worsened, as reflected by the June PMI at 43.6.

Any value below 50 means that the sector’s economic activity shrinks. Therefore, the 43.6 release is far away from 50, thus spelling trouble for the manufacturing sector.

The services PMI disappointed as well, coming out at 52.4. While above 50, it is below the 54.4 level the market expected and below the previous 55.1.

Euro was sold across the board

Traders did not waste time and sold the common currency immediately. As such, the EUR/USD exchange rate dropped by about 1%.

Similar market moves were seen on the EUR/JPY pair, while other crosses dropped by half a percentage point.

But the day is still young.

With no important economic data for the rest of the trading week and next week being the last one in June, the euro may have more room to fall.

EUR/USD, in particular, looks vulnerable.

The European Central Bank vowed to raise the interest rates again in July, but with such poor economic data, it may have to think twice before acting. As such, some traders will pare their bets on another interest rate hike, which may add fuel to the fire and trigger another wave of selling in the euro pairs.

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