LONDON—The euro suffered heavy losses Wednesday after economic indicators underpinned fears of a deepening slump in euro-zone growth, contrasting unfavorably with the previous day's robust U.S. manufacturing data.
The common currency was recently trading at $1.3152 compared with $1.3237 late Tuesday in New York. It was at £0.8117 from £0.8160 and at 1.2017 Swiss francs from 1.2015 franc.
The pound traded at $1.6200 compared with $1.6222 late Tuesday, while the Australian dollar was at $1.0335 from $1.0334.
The dollar was at ¥80.34 compared with ¥80.09, and was at 0.9139 franc from 0.9078 franc late Tuesday.
The ICE Dollar Index, which tracks the U.S. dollar against a basket of currencies, was at about 79.200 from 78.820.
A raft of purchasing managers' indexes from the manufacturing sector helped paint a deeply gloomy picture for the euro zone.
Italy was among the standouts, sinking further below the 50 cutoff point that distinguishes growth from contraction, falling to 43.8 against the expected 46.7. Germany finished off the bad run with a below-consensus 46.2 compared with an expected 46.3.
The euro slumped to less than $1.3180 from around $1.3225, before extending losses as poor jobs data added to the gloom. The currency went through the $1.3150 level, breaking through an options-related barrier before hitting the day's low at $1.3134.
The common currency also slumped to a 22-month low against sterling at £0.8114 and in derivative markets there was some evidence of investors hunting down protection in case of a bigger drop in the euro against the dollar, with sentiment gauges showing a slight pickup in negative euro bets using options.
The weak euro-zone data contrasted with the release Tuesday of a stronger-than-expected Institute of Supply Management survey for April, a widely tracked measure of U.S. manufacturing output.
"Compared to the strong ISM the euro-zone numbers out this morning were very dismal," analysts at Danske Bank wrote in a research note. "We think we could see more people speculating whether the euro-zone PMIs could trigger [an interest] rate cut from the European Central Bank tomorrow or more likely in June."
The ECB meets tomorrow to decide on interest rates and while the consensus market view remains for an unchanged reading, all eyes will be on ECB President Mario Draghi's subsequent news conference at 12.30 p.m. GMT.
The Swiss franc came under a little pressure after Switzerland published a dismal economic release of its own. The Swiss PMI indicator slumped to its lowest level since November last year and came in at 46.9 for April.
Next up is the U.S. Automatic Data Processing Inc. jobs report for April. A positive reading could accelerate losses in the euro further, ahead of Friday's highly influential U.S. nonfarm payrolls report.
"Today's ADP report will provide the usual sneak preview of the most important element of the labor market report, the change in the number of employed," analysts at Commerzbank said in a note to clients.
Elsewhere, the Romanian leu was steady after the country's central bank stood pat on rates. Even so, the euro remained above 4.40 due to some lingering political uncertainty following the formation of a new government.
