European session review: EUR edges lower after latest data from Eurozone

EUR depreciated slightly against most of its major rivals in the European session on Friday, as investors assessed the latest reports on Eurozone’s services sector PMI and retail sales data for July, while awaiting the most important event of the week - the release of the U.S. jobs data for August later today.

The latest report by IHS Markit revealed that the Eurozone’s services sector saw a slight loss of growth momentum in August after hitting a 15-year high in the previous month. According to the report, the IHS Markit Eurozone PMI Services Business Activity Index came in at 59.0 in August, down from 59.8 in July and a flash estimate of 59.7. Economists had forecast the indicator to stay unrevised at 59.7.

Meanwhile, the data, provided by Eurostat this morning, showed an unexpected decline in the euro area's retail trade volumes in July. According to the report, the seasonally adjusted volume of retail trade in the Eurozone fell by 2.3% m/m in July, following a revised 1.8% m/m advance in June (originally a 1.5% m/m gain). On a y/y basis, the region’s adjusted retail sales climbed by 3.1%, following a revised 5.4% surge in June (originally a 5.0% jump). This was the smallest gain in five months. Economists had forecast the Eurozone’s retail sales in July would increase 0.1% m/m and 4.8% y/y.

Investors are waiting edgily for the U.S. August employment situation report, which will be released at 12:30 GMT and is expected to be a catalyst for the currency market, as it could provide clues on the timing of the Federal Reserve’s pullback in bond buying and determine the direction of the U.S. currency.