German manufacturing PMI stands at 51.8Â points, better than expected. Services PMI slightly disappoints with 54.8 but the composite is OK at 54.3 points. Manufacturing is critical here, and the return to growth territory adds some confidence.
EUR/USD is bouncing back up to 1.2640.
Markit’s manufacturing PMI for Germany was expected to slide from 49.9 to 49.6 points in October. The services PMI carried expectations for a drop from 55.7 to 55 points. The 50 point mark separates growth from contraction. These are preliminary numbers. Last month, the manufacturing PMI was eventually downgraded to just under 50 points – to minimal contraction.
EUR/USD traded around 1.2620 towards the publication.
Here is the preview:Â EUR/USD: Trading the German Flash Manufacturing PMI.
The locomotive of the euro-zone has shown quite a few worrying signs of late. Factory orders, industrial output and various business and consumer confidence figures fell short of expectations and the general feeling is that Germany is unable to pull the euro-zone forward on its own.
Earlier, French PMIs fell short of expectations and this weighed on the euro.Also the zone’s No. 2 country is not doing so well. Good news came out of the fourth largest economy: Spain reported a big drop in unemployment.
What is the next direction of the euro? The most recent opinion we posted is:2 Reasons For Staying Bearish EUR/USD Targeting 1.25 – Deutsche Bank
