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Fundamental Forex Analysis

Eurozone Preliminary Manufacturing PMI rises to 47.8 in January, EUR/USD uninspired

  • Eurozone Manufacturing PMI arrives at 47.8 in January vs. 46.8 expected.
  • Eurozone Services PMI arrives at 52.2 in January vs. 52.8 expected.

The Eurozone manufacturing sector activity showed improvement this month but remained in the contraction territory, the latest manufacturing activity survey from IHS/Markit research showed on Friday.

The Eurozone manufacturing purchasing managers index (PMI) came in at a five-month high of 47.8 in January vs. 46.8 expected and 46.3 last while the Services PMI dropped to a two-month low of 52.2 in the reported month vs. 52.8 expected and 52.8 last.

The IHS Markit Eurozone PMI Composite steadied at 50.9 in January vs. 51.2 expected.

Comments from Andrew Harker, Associate Director at IHS Markit:

“While the year may have changed, the performance of the eurozone economy was a familiar one in January. Output growth was unchanged from the modest pace seen in December, signalling that the economy failed again to record a pick-up in growth momentum.”

“The failure of growth to accelerate was in spite of some areas of positivity. The service sector remained in expansion, while the worst of the manufacturing downturn looks to have passed and industry appears to be moving towards stabilization. France and Germany continued to grow, while business confidence across the single-currency area jumped to a 16-month high.”

FX Implications:

The shared currency failed to react to the mixed Eurozone PMI readings, with EUR/USD keeping its range below 1.1050. The spot faded an uptick to 1.1061 highs, reached after a beat on the German Manufacturing and Services PMI reports.  

EUR/USD Technical levels to watch:


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