Eurozone Flash Manufacturing PMI unexpectedly rises to 47.0 in August, EUR/USD keeps 1.1100

The Eurozone manufacturing sector activity showed an unexpected improvement while staying in the contraction territory this month, the latest manufacturing activity survey from IHS/Markit research showed.

The Eurozone manufacturing purchasing managers index (PMI) came in at 2-month highs of 47.0 in August vs. 46.2 expected and 46.5 last while the services PMI rose to 2-month highs of 53.4 vs. 53.0 expected and 53.2 last.

The IHS Markit Eurozone PMI Composite advanced from 51.5 in July to 51.8 in August, hitting fresh 2-month tops.

Comments from Andrew Harker, Associate Director at IHS Markit

“The dynamics of the eurozone economy were little changed in August, with solid growth in services continuing to hold the wider economy’s head above water despite ongoing manufacturing decline. While the rate of overall expansion ticked up, we’re still looking at GDP only rising by between 0.1% and 0.2%, based on the PMI data for the third quarter so far.”

“The lack of a quick rebound from the recent economic slowdown has impacted firms’ confidence, with sentiment the lowest in over six years. It appears that companies are braced for a sustained period of weakness, and as a result are showing greater reluctance to take on additional staff.”

The EUR/USD pair extended its bounce above the 1.11 handle on upbeat Euro area Flash Manufacturing PMI reports, now testing the key resistances stacked up near 1.1115 region for a sustained recovery.