EUR/USD Unfazed by Markit PMIs, Door Open for Further ECB Easing
- Flash Eurozone Manufacturing PMI at 52.6 vs 51.5 expected
- Flash Eurozone Composite PMI at 52.6, 20-month low
- EUR/USD was little changed on the news
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The Eurozone PMI Composite Index came at 52.6, below the expected 52.8 and the prior 52.9, which marked a 20-month low.
The Services PMI Activity Index printed 52.1 (21-month low), below the prior and expected 52.8 print.
The Manufacturing PMI was the positive at a 3-month high, rising to 52.6, above the expected 51.5 number and the prior 51.7 read.
The Euro-Zone reading came after earlier today the German Markit PMI figures showed a similar pattern to the Euro-Zone numbers, marking a rise in manufacturing but a decline in services, while the France figures beat expectations on all fronts.
According to Markit, a robust increase in France’s service sector activity offset the ongoing stagnation in the nation’s manufacturing sector, which led the French Composite PMI to rise above its German counterpart for the first time in over four years
A reading of less than 50 indicates a contraction of activity, above 50 points to an expansion, and an index of 50 says that no change has occurred.
Looking into the report, Markit remarked that it remains clear that the economic upturn is still fragile, inflationary pressures also are still relatively benign and business confidence at the service sector has declined significantly. In turn, Markit suggested that the door remains open for policymakers to provide further policy support this year.
The EUR/USD seemed to have reacted to the France reading with a slight rise on London open, followed by a decline on the German figures, while reaction to the Euro-Zone numbers was subdued, perhaps due to the prior two readings already indicating the general theme for the report.
Meanwhile, the DailyFX Speculative Sentiment Index (SSI) is showing that about 44.0% of traders are long the EUR/USD at the time of writing.
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EURUSD 5-Minute Chart: September 23, 2016
--- Written by Oded Shimoni, Junior Currency Analyst for DailyFX.com
To contact Oded Shimoni, e-mail email@example.com
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.