Eurozone Preliminary Manufacturing PMI misses estimates with 54.4 in May

Eurozone Manufacturing PMI arrives at 54.4 in May vs. 54.9 expected.
Bloc’s Services PMI falls to 56.3 in May vs. 57.5 expected.
EUR/USD falls off the highs on the downbeat Eurozone PMIs.

Dhwani Mehta FXStreet

The Eurozone manufacturing sector expansion fell short of expectations in May, the latest manufacturing activity survey from S&P Global research showed on Tuesday.

The Eurozone Manufacturing purchasing managers index (PMI) arrived at 54.4 in May vs. 54.9 expectations and 55.5 last. The index hit a two-month top.

The bloc’s Services PMI dropped sharply to 56.3 in May vs. 57.5 expected and 57.7 previous. The indicator registered two-month lows.

The S&P Global Eurozone PMI Composite fell to 54.9 in May vs. 55.3 estimated and 55.8 previous. The gauge reached the lowest level in two months.

Comments from Chris Williamson, Chief Business Economist at S&P Global

“The eurozone economy remained encouragingly resilient growth in May, as a beleaguered manufacturing sector was offset by a buoyant service sector.“

“Although factories continue to report widespread supply constraints and diminished demand for goods amid elevated price pressures, the economy is being boosted by pent-up demand for services as pandemic-related restrictions are wound down. May saw a further surge in spending on tourism and recreation in particular.”

FX implications

EUR/USD ticks a few pips lower from daily highs of 1.0736 on dismal Eurozone PMIs. The pair was last seen trading at 1.0722, still up 0.33% on the day.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

EUR/USD flirts with weekly lows near 1.1770

EUR/USD now comes under further selling pressure, breaking below the 1.1800 support to challenge the area of weekly throughs near 1.1770 on Thursday. The pair’s decline comes in response to marked gains in the US Dollar amid steady geopolitical tensions. Ealier in the day, the ECB’s Lagarde delivered cautious remarks, although the currency remained apathetic.

GBP/USD threatens the 200-day SMA near 1.3440

GBP/USD rapidly leaves behind Wednesday’s strong advance, coming under heavy pressure and retesting the 1.3440 zone, where the critical 200-day SMA is located. Cable’s deep pullback follows the strong gains in the Greenback, while investors continue to pencil in a potential BoE rate cut in March.

Gold trims gains, slips back to around $5,170

Gold is now facing some downside pressure, hovering around the $5,170 region on Thursday. The yellow metal surrenders part of its earlier gains on the back of the resurgence of the buying interest in the Greenback. In the meantime, geopolitical tensions in the Middle East continue to limit the downside potential for now.