Euro-zone PMIs Blast Expectations and Rise to 2-Year Highs
THE TAKEAWAY: Euro-zone composite PMI rises to a 2-year high at 51.7 -> France services PMI declines in August -> Euro pares earlier losses
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The Euro-zone composite output index for August set a 2-year high, according to Markit’s preliminary estimate. The Euro rose 30 pips against the US Dollar and erased earlier losses, which were seen following a French PMI release.
The composite output index for the Euro-zone rose to 51.7, beating expectations for 50.9 and up from 50.5 in July. The Euro-zone services Purchasing Managers’ Index rose more than expected from 49.8 to a 2-year high at 51.0, and the manufacturing PMI rose from 50.3 to 51.3.
The PMI’s in the Euro-zone’s biggest economy beat expectations, and the manufacturing activity index reached a new 2-year high; the German PMI for manufacturing rose to 52.0 following 50.7 in July. Both French PMI’s disappointed expectations, and the services PMI declined in August from the previous month.
Euro-zone composite output rose for the second straight month according to the index. The rise in output in July and August makes sense when considering the 0.3% gross domestic product expansion reported for the second quarter in the Euro-zone. “The third quarter is shaping up to be the best that the euro area has seen in terms of business growth since the spring of 2011,” said Markit Chief Economist Chris Williamson.
The Euro continues to trade slightly above 1.3350 against the US Dollar, pairing losses that followed the French PMI disappointment. A 6-month high recently set at 1.3451 may provide resistance here, and a broken resistance line around 1.3180 may provide support.
EURUSD Daily: August 22, 2013
Chart created by Benjamin Spier using Marketscope 2.0
-- Written by Benjamin Spier, DailyFX Research. Feedback can be sent to firstname.lastname@example.org .
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