Euro drops as glum PMI readings stoke bets of more ECB easing

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Key Points

LONDON/SINGAPORE (Reuters) The euro fell sharply against the dollar on Monday, as business activity readings painted a grim picture of the euro zone economy and fuelled bets of more policy easing by the European Central Bank (ECB) this year...

The common currency dropped 0.6% to $1.1096 on track for its biggest daily fall in more than three months and moving further away from late Augusts 13-month high that was driven by bets of faster U.S. monetary policy easing...

A survey compiled by S&P Global showed euro zone business activity contracted sharply and unexpectedly this month as the blocs dominant services industry flat-lined, while a downturn in manufacturing accelerated...

Traders now anticipate cuts of around 42 bps this year from the ECB, compared with around 38 bps last week, implying that they expect a stronger chance of the central bank cutting rates again in October...

The pound slipped 0.3% to $1.3281 but came off its session low after a similar survey showed British businesses reported a slowdown in growth this month, though it was less severe than the euro zone numbers...

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