Gloomy PMIs data hits euro, Iraq crises keeps yen high

Euro edged lower in Europe Monday, extending losses into second straight sessions, after data showed euro-area business activity has slowed more than expected in June in contrast with upbeat numbers from China.

Euro fell 0.13 percent so far after it witnessed a limited attempt to the upside last week, to trade at $1.35796 after opening at $1.35870. The EURUSD pair so far hit intraday high at $1.36132 and low at $1.35787.

In a report, market research group Markit said that its preliminary Purchasing Managers’ Index on manufacturing activity in the Eurozone expanded at the slowest rate in seven months in June, underlining concerns over the health of the region’s economy.

Preliminary manufacturing PMI declined to a seasonally adjusted 51.9 this month, down from a final reading of 52.2 in May. Meanwhile, the services PMI weakened to a seasonally adjusted 52.8 in June from a reading of 53.2 in May.

Although activity in Germany slowed slightly, the main source of weakness for the Eurozone was once again France. French private-sector activity declined for a second straight month in June.

French services PMI fell to 48.2 from 49.1 in May, while the manufacturing PMI fell to 47.8 from 49.6 to reach a six-month low.

In Germany, the manufacturing sector widened expansion to 52.4 this month from 52.3 but the services showed a retreat from 56.0 to 54.8.

Yen advances on Iraq concerns 

Euro fell sharply against the Japanese yen, to trade at ¥138.3320, down by 0.35 percent compared with day opening at ¥138.686. The EURJPY pair so far fell to an intraday low at ¥138.276 and high at ¥138.799.

The yen rose on Monday against the dollar and euro, as investors sought a safe haven amid escalating conflict in Iraq where fighting continued between Sunni extremists and the Iraqi government troops.

Militants - led by Islamic State of Iraq and the Levant (ISIL) - seized control of more towns over the weekend after taking control of two frontier crossings on Iraq-Syrian border, according to CNBC News.

Upbeat China PMI boosts Aussie

Earlier, the HSBC/Markit Flash China PMI showed China`s factory sector activity expanded for the first time in six months in June, offering new signs the economy is stabilizing thanks to Beijing`s measures to shore up growth.

The Aussie advanced sharply after Chinese solid data, trading at $0.94386, after opening at $0.93745, having reached a session high of $0.94436.