RTTNews - The euro moved away from its multi-month highs against the dollar and yen as stock markets declined in the U.S. and Europe, cooling risk appetite. The common currency rebounded modestly against the pound.

Some lackluster economic data in the U.S. led markets to surrender some of the recently-seen gains. With stocks rising, the European currency had been trending sharply higher for more than a month against its lower-yielding rivals from the U.S. and Japan.

Also on Wednesday, official data confirmed that the Eurozone contracted the most since records began in 1995 on plummeting investment and exports.

The euro eased away from a five-month high against the dollar, falling near 1.4170 in early afternoon trading. Early in the morning, the common currency reached 1.4338, its highest level of 2009.

In the U.S., Automatic Data Processing reported non-farm private employment fell by 532,000 jobs in May following a revised decrease of 545,000 jobs in April. Economists had expected a decrease of about 525,000 jobs compared to the decline of 491,000 jobs originally reported for the previous month.

Later, a Commerce Department report showed that orders for manufactured goods rose 0.7 percent in April following a revised 1.9 percent drop in March. Economists had expected orders to increase by 0.9 percent compared to the 0.9 percent decrease originally reported for the previous month.

Similarly, the euro slipped off a 7 1/2-month high of 138.00 against the Japanese yen. The European currency dipped near 135.60 in mid-day trading.

Bank of Japan's policy board member Hidetoshi Kamezaki said Wednesday the central bank should implement policies proactively and swiftly depending on changes in economic conditions.

The European currency climbed away from a six-month low against the British pound, rising to 0.8664. The euro had dipped as low as 0.8574 earlier in the day.

The Nationwide Building Society said the UK consumer confidence indicator climbed to 53 in May from 51 in April, the highest since November 2008. Meanwhile, economists had forecast a reading of 52.

On the economic front in the Eurozone, a preliminary estimate from the statistical office Eurostat showed that the 16-nation Euro bloc contracted 2.5% in the first quarter from the fourth quarter. This was the largest decline since 1995 and matched the initial estimate released on May 15. The decline in the fourth quarter was 1.8%. The stretch of contraction, which started in the second quarter of 2008, indicates severe recession.

Separately, the Eurostat said Eurozone industrial producer prices dropped 4.6% year-over-year in April, compared with a 2.9% fall in the previous month, revised from 3.1% drop reported initially. Economists had expected a decline of 4.5%.

The decline in Eurozone service sector activities eased further in May, reports said, citing data released by the Markit Economics. The purchasing managers' index or PMI for the Eurozone service sector rose to 44.8 in May from a flash reading of 44.7 and 43.8 in April. The PMI thus reached a seven-month high. However, the headline index is still below the 50-mark that divides expansion and contraction.

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