EUR/USD re-takes 1.17 after German Preliminary Manufacturing PMI beats estimates with 56.6 in Sept
|- German Manufacturing PMI arrives at 56.6 in Sept vs. 52.5 expected.
- Services PMI in Germany drops to 49.1 in Sept vs. 52.9 expected.
- EUR/USD looks to regain 1.1700 on mixed German PMIs.
The German manufacturing sector expanded more-than-expected in September, the preliminary manufacturing activity report from IHS/Markit research showed this Wednesday.
The German manufacturing purchasing managers index (PMI) arrived at 56.6 in September versus 52.5 expected and 52.2 previous, fresh 26-month highs.
Meanwhile, Services PMI contracted to 49.1 in September as against the previous month’s reading of 52.5 and 52.9 anticipated. The index hit a three-month low.
The IHS Markit Flash Germany Composite Output Index dropped to three-month lows of 53.7 in September vs. 54.2 expected and 54.4 previous.
Key comments from Phil Smith, Principal Economist at IHS Markit
“While the latest PMI data shows German economic output continuing to rise in September, it highlights a growing divergence in trends between manufacturing and services.”
“With services business activity falling for the first time in three months, the recovery in the tertiary sector has possibly reached a ceiling thanks to ongoing social restrictions and still-high levels of uncertainty in the economy, including around job security. In contrast, manufacturing is still rebounding strongly thanks to in part to improving export demand, with sharply rising levels of output and new orders helping to slow the rate of job losses in the sector.”
FX implications
On the mixed German PMI numbers, the EUR/USD pair re-attempted the 1.1700 level, bouncing-off two-month lows of 1.1672.
The spot now trades 0.08% lower at 1.1697, as the US dollar strength continues to dominate.
EUR/USD technical levels to watch
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