- EUR/GBP loses ground following the release of PMI data from both economies.
- The Eurozone Composite PMI fell to 50.1 in July, hitting a five-month low.
- The S&P Global Composite PMI rose to 52.7 in July from the previous reading of 52.3.
EUR/GBP extends losses for a third consecutive day, trading around 0.8400 during European hours on Wednesday. The EUR/GBP pair faces renewed selling pressure following the release of disappointing HCOB Purchasing Managers’ Index (PMI) data from the Eurozone and Germany.
Wednesday’s data indicated a further contraction in the Eurozone manufacturing sector, with service sector activity declining in July. The Eurozone manufacturing PMI fell to 45.6 in July from 45.8 in June, below the market consensus of 46.1 and marking a seven-month low.
The bloc’s services PMI fell to 51.9 in July from 52.8 in June, below expectations of 53.0 and hitting a four-month low. The Eurozone HCOB Composite PMI fell to 50.1 in July versus 51.1 expected and 50.9 in June. The index hit a five-month low.
The German manufacturing sector contraction unexpectedly worsened, with the PMI falling to 42.6 in July from 43.5 in June, significantly below the forecast of 44.0. This marks the lowest level in three months. Similarly, the services sector underperformed, with the services PMI falling to 52.0 in July from 53.1 in June, below market expectations of 53.1 and hitting a four-month low.
In the United Kingdom (UK), the S&P Global Composite PMI rose to 52.7 in July from the previous reading of 52.3. The Manufacturing PMI rose to 51.8 from 50.9 previously, indicating an improvement in the performance of the manufacturing sector. However, the Services PMI declined slightly to 52.4, below the expected reading of 52.5 for July.
The lower likelihood of a rate cut in August by the Bank of England (BoE) is expected to support the British Pound (GBP) and weaken the EUR/GBP pair. Traders are awaiting the results of the UK PMI activity survey, which will be released during the London market session on Wednesday.
Economic indicator
S&P Global Integrated PMI
PMI’s monthly integrated manufacturing and services reports, published by Markit EconomicsThe indexes are based on surveys of executives from a large number of private companies in the manufacturing sector and also from 300 companies in the service sector. The information is released on the third business day of each month. Each response is weighted according to the size of the company and its contribution to total output or service output, as assessed by the sub-sector of companies to which it belongs. Responses from larger companies have a greater impact on the final indices than those from smaller companies. The results are presented through a question, which shows the percentage of respondents who reported an improvement, deterioration or no change from the previous month. From these percentages, an index is derived: a level of 50.0 signals no change from the previous month, above 50.0 signals an increase (or improvement) and below 50.0, a decrease (or contraction).
Latest Post:
Wed Jul 24, 2024 08:00 (Prel)
Frequency:
Monthly
Current:
50.1
Dear:
51.1
Previous:
50.9
Fountain:
S&P Global
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
