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Forex - Euro hits session lows as Athens stock market slumps

Published 08/03/2015, 07:46 AM
Updated 08/03/2015, 07:46 AM
© Reuters.  Euro hits session lows as Athens exchange tumbles

© Reuters. Euro hits session lows as Athens exchange tumbles

Investing.com - The euro turned lower against the dollar on Monday as the Greek stock market posted steep losses in the first day of trade following a five-week shutdown after capital controls were imposed to prevent a financial collapse in Greece.

EUR/USD was down 0.31% to 1.0956, off earlier highs of 1.0996.

The main Athens stock index fell almost 23% at the open, before recovering slightly, with banking shares, which comprise about 20% of the Greece index, hardest hit.

Trading on the Athens bourse was suspended at the height of the Greek debt crisis in late June as part of capital controls imposed to stem outflows that threatened to collapse the country's banking system.

The euro found some support after data on Monday showed that the euro area manufacturing sector continued to expand at a steady pace at the start of the third quarter.

The final reading of the euro zone manufacturing purchasing managers' index for July came in at 52.4, up from the initial estimate of 52.2.

Continuing expansion in Germany, Spain and Italy offset a record contraction of the Greek manufacturing sector last month after capital controls were imposed.

Meanwhile, the single currency was steady against the yen and the pound, with EUR/JPY firm at 136.03 and EUR/GBP at 0.7029.

Sterling showed little reaction after data earlier showed that activity in the U.K. manufacturing sector ticked higher last month but remained relatively subdued.

The U.K. manufacturing PMI ticked up to 51.9 last month from 51.4 in June, which was the lowest level in over two years.

Investors were turning their attention to the Institute of Supply Management’s report on U.S. manufacturing activity due out later in the day.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.33% to 97.65.

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