News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View more
Real Time News
  • RBA Minutes: - Board committed to providing high level of monetary support - Q3 GDP expected to decline materially - Central scenario is rates on hold until 2024 - BBG $AUDUSD
  • Heads Up:🇦🇺 RBA Meeting Minutes due at 01:30 GMT (15min)
  • New Zealand reports 14 new local Covid cases - BBG
  • I had a chance to talk with @tastytradeRyan and @victorJ0NES about Evergrande and its impact on US markets — always great talking with these two guys on Mondays.
  • RT @cheddar: Stocks dropped the most since May on Monday, sending shockwaves through Wall Street. @CVecchioFX explains the global impact of…
  • The Spinning Top candlestick pattern forms part of the vast Japanese candlestick repertoire with its own distinct features. Gain a better understanding of the spinning top candlestick here:
  • There are three major forex trading sessions which comprise the 24-hour market: the London session, the US session and the Asian session. Learn about the characteristics of each session here:
  • What is your forex trading style? Take the quiz and find out:
  • RBNZ's Hawkesby talking "considered steps" when setting monetary policy, leaning towards 25bps - With money markets pricing in 31bps worth of tightening at the October meeting. Room for disappointment.
  • Gold has plunged nearly 5% off the Monthly high with the sell-off now probing key weekly support here at 1738/47- looking for a pivot here with the Fed interest rate decision on tap. Get your $XAUUSD market update from @MBForex here:
UK, EZ PMIs Drop But Retain Good Momentum - EUR, GBP Drifting Higher

UK, EZ PMIs Drop But Retain Good Momentum - EUR, GBP Drifting Higher

Daniela Sabin Hathorn, Analyst

Key Talking Points:

  • Euro area and UK PMIs come in weaker than expected, but strong momentum remains
  • EUR/USD and GBP/USD are able to bounce higher after their recent slip

We’ve seen a range of PMI data out this morning and almost all of the readings have been weaker than expected butthe data shows how economic recovery retained impressive momentum in August. Kicking it off with France, the manufacturing figure came in at 57.3 as predicted by economists, dropping from 58, whilst the services reading came in at 56.4, below the 57 expected, bringing down the composite reading to 56.4, below expectations of 57.

UK, EZ PMIs Drop But Retain Good Momentum - EUR, GBP Drifting Higher

Germany was next and despite the services print being able to hold above expectations (61.5 vs 61 exp) it still saw a drop from the previous month. Maybe the more concerning print was the manufacturing PMI, which dropped to 62.7 (65 exp) from 65.9, its lowest reading since February this year and an indication that concerns about slowing demand and growth may be materializing, especially as Germany is the main exported within the Eurozone.

That said, the readings in July were the highest in two decades, showing that business activity has been very strong over the summer months as a rapid vaccine rollout has allowed more businesses to operate. The aggregate PMIs for the Eurozone have also come in weaker than expected for August but they remain firmly in expansion.

In the UK, the manufacturing PMI beat expectations whilst the services reading came in much softer than expected at 55.5 (59 exp), as staff shortages and wage inflation has started to have an effect on costs and margins.

EUR/USD Daily chart

UK, EZ PMIs Drop But Retain Good Momentum - EUR, GBP Drifting Higher

The Euro has been slightly stronger this morning with EUR/USD getting a small nudge higher after the German PMI data was released. As I mentioned, despite the readings being below expectations, it isn’t surprising that the data has come off slightly since the two-decade high seen in July, given recent concerns about slowing growth and rising delta cases around the globe.

EUR/USD has managed to hold on to the 1.17 mark but remains within the key support area. Buyers should target to get the pair above 1.18 if they want to recover some bullish momentum but the 1.19 area is also likely to offer some resistance in the short term.



UK, EZ PMIs Drop But Retain Good Momentum - EUR, GBP Drifting Higher

The British Pound is also picking up some momentum this morning after a week of strong pullbacks saw GBP/USD drop to a one-month low just above 1.36. The key challenge up ahead for the pair will be 1.3670, followed by an area of conflicting price pressures between 1.3719 and 1.3802. To the downside, a break below 1.3570 (23.6% Fibonacci retracement) would likely bring on further weakness towards 1.3520.

Learn more about the stock market basics here or download our free trading guides.

--- Written by Daniela Sabin Hathorn, Market Analyst

Follow Daniela on Twitter @HathornSabin

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.