Euro Rises on an Upward Revision of the Manufacturing PMI
THE TAKEAWAY: Euro-zone manufacturing PMI revised higher to 48.3 -> Markit says GDP likely to contract 0.2% in Q2 -> Euro rises
The Purchasing Managers’ Index for manufacturing in May was reported higher than previous estimates and expectations in the Euro-zone and its four biggest economies. However, those five manufacturing index results were all announced below the 50.0 neutral line, which may have been why the Euro only slightly reacted to the better than expected releases.
The May manufacturing PMI for the entire Euro-zone was reported at a 15-month high of 48.3 in Markit’s final release, beating a previous estimate of 47.8 and higher than 46.7 in April. The German manufacturing PMI was reported at 49.4, the highest PMI among Euro-zone countries, while the Spanish index result reached a two year high of 48.1.
Markit said the Euro-zone economy is likely to have contracted 0.2% in Q2, based on all of the most recent PMI releases, thereby extending the region’s recession into a seventh quarter. “The sector still seems some way off from stabilizing, however, and therefore remains a drag on the economy,” said Markit Chief Economist Chris Williamson. Earlier today, DailyFX explained why the better than expected PMI results may lessen the chances of another ECB rate cut, and is therefore Euro positive.
However, the Euro only rose about twenty points against the US Dollar during the release of the better than expected PMI’s, and EUR/USD is about 0.26% higher over today’s trading. The pair may see support by the key 1.3000 level, which was crossed earlier today. EUR/USD may see resistance right here, around 1.3035, by a downward trend line from February.
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EURUSDDaily: June 3, 2013
Chart created by Benjamin Spier using Marketscope 2.0
-- Written by Benjamin Spier, DailyFX Research. Feedback can be sent to email@example.com .
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.