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Fundamental Forex Analysis

Eurozone Preliminary Manufacturing PMI beats estimates with 44.8 in March, EUR/USD uninspired

  • Eurozone Manufacturing PMI arrives at 44.8 in March vs. 39.0 expected.
  • Eurozone Services PMI arrives at 28.4 in March vs. 39.0 expected.

The Eurozone manufacturing sector activity showed worsening conditions this month and remained in the contraction territory, the latest manufacturing activity survey from IHS/Markit research showed on Tuesday.

The Eurozone manufacturing purchasing managers index (PMI) came in at a 92-month low of 44.8 in March vs. 39.0 expected and 49.2 last while the Services PMI plunged to a record low of 28.4 in the reported month vs. 39.0 expected and 52.6 last.

The IHS Markit Eurozone PMI Composite slumped to 31.4 in March (record low) vs. 38.8 expected.

Comments from Chris Williamson, Chief Business Economist at IHS Markit

“Business activity across the eurozone collapsed in March to an extent far exceeding that seen even at the height of the global financial crisis. Steep downturns were seen in France, Germany and across the rest of the euro area as governments took increasingly tough measures to contain the spread of the coronavirus.“

“The March PMI is indicative of GDP slumping at a quarterly rate of around 2%, and clearly there’s scope for the downturn to intensify further as even more draconian policies to deal with the virus are potentially implemented in coming months.”

FX implications

The shared currency failed to react to the mixed Eurozone PMI readings, with EUR/USD wavering in a 25-pips tight range around 1.0820 region. The bulls remain unperturbed by the mixed German PMI report as well.

EUR/USD technical levels to watch

 

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