Markit’s purchasing managers’ indices for both Germany and France disappointed. For Germany, the manufacturing PMI rose from 52.3 to 52.4 points, below 52.7 expected. The services sector dropped from from 56 to 54.8, less than 55.8 expected. The figures are still in growth territory, above 50, but that doesn’t go for France.
EUR/USD is around 20 pips lower. The US dollar’s retreat across the board cannot lift euro/dollar on its own. The euro-zone’s inability to reach significant growth weighs on the common currency, especially as flows aren’t all going to the euro-zone.
Earlier, French PMIs fell short of expectations: manufacturing dropped from 49.6 to 47.8 points, while it was expected to remain unchanged. Services PMI fell from 49.1 to 48.2 instead of ticking up as expected.
It had already climbed nicely from the 1.3585 support line to as high as 1.3613 riding on the greenback’s weakness, but this was all erased.
Further support awaits at 1.3550 and resistance appears at 1.3650. For more, see the EURUSD forecast.
The all-European flash PMIs are released soon, but they usually have a smaller impact due to the impact of these two large countries.
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