Forex analytics and overview

What’s Behind the Nosedive in Eurozone Economic Activity?

2024.09.23 10:54

Flash Eurozone PMI estimates sent the down 0.67% over the hour, as they were much weaker than expected and increased pressure on the ECB to continue easing monetary policy.

German manufacturing PMI the lowest since Sep 2023

This is not the first time that a significant divergence of preliminary PMIs from expectations has become a driver of the European currency market. In terms of impact on the EURUSD, they rival the US employment data.

France’s economic boom did not last long, as the composite PMI estimate for September fell to 47.4 from 53.1 the previous month and well below the expected 52.7. The manufacturing PMI has been hovering around 44 for the past three months and has only been above 50 once in the past two years. The services sector fell below the 50 mark to 48.3, its lowest level since March.

Estimates of business activity for September suggest that German manufacturing activity slowed at the fastest pace in 12 months, continuing its decline since May and falling to 40.3. The services sector also reversed the decline of four months ago, although it remains formally in expansion territory above 50.

Flash Eurozone PMI fell below expectations

Manufacturing activity is contracting at the fastest pace since last December. At 50.5, the services sector is expanding at its slowest pace since February this year, but it’s still growing.

The negative surprise in the data triggered a new downward momentum in the EURUSD and a temporary dip below 1.11. The pair has failed to consolidate above 1.12 for the past month, and the current decline, if sustained, would look like a double top formation with a potential near-term downside target of 1.10 and a more distant one of 1.09.

EURUSD turned lower from 1.12 area

The obstacle to a longer-term weakening of the euro against the dollar is Fed policy. The FOMC cut rates by 0.5% last week, and current forecasts point to more active easing than the ECB.

The FxPro Analyst Team



Source link

Related Articles

Back to top button
aavegotchi
Aavegotchi (GHST) $ 1.12 5.56%
wuffi
WUFFI (WUF) $ 0.00000067886689 3.60%
mcdull
McDull (Meme) (MCDULL) $ 0.000006 3.87%
orion-protocol
Orion (ORN) $ 1.66 19.18%
aurora-dao
IDEX (IDEX) $ 0.062574 1.50%
eliza
Eliza (ELIZA) $ 0.055627 26.20%
unit-00-rei
Unit 00 - Rei (REI) $ 0.05623 0.80%
billion-dollar-cat-runes
BILLION•DOLLAR•CAT (Runes) (BDC) $ 0.05602 7.20%
geodnet
Geodnet (GEOD) $ 0.228909 6.42%
portal-2
Portal (PORTAL) $ 0.334971 4.14%
bitget-wallet-token
Bitget Wallet Token (BWB) $ 0.392834 11.37%
magic-internet-money
Magic Internet Money (Ethereum) (MIM) $ 0.998887 0.00%
ora-coin
ORA Coin (ORA) $ 1.51 2.69%
metadium
Metadium (META) $ 0.03247 0.27%
a3s
A3S (AA) $ 0.230385 0.18%
funfair
FUNToken (FUN) $ 0.005194 1.78%
memes-ai
Memes AI (MEMESAI) $ 0.054565 11.53%
bitrise-token
Bitgert (BRISE) $ 0.00000013861214 11.03%
krypton-dao
Krypton DAO (KRD) $ 0.534283 4.43%
star-atlas-dao
Star Atlas DAO (POLIS) $ 0.201245 1.25%
socean-staked-sol
Sanctum Infinity (INF) $ 250.31 3.65%
memefi-2
MemeFi (MEMEFI) $ 0.005448 1.54%
gems-vip
Gems VIP (GEMS) $ 0.127029 1.52%
dione
Dione (DIONE) $ 0.005349 2.36%
electroneum
Electroneum (ETN) $ 0.003013 0.90%
apollox-2
APX (APX) $ 0.124422 5.34%
uquid-coin
Uquid Coin (UQC) $ 5.40 3.56%
moo-deng-2
MOO DENG (MOODENG) $ 0.000128 0.13%
dexalot
Dexalot (ALOT) $ 1.01 2.09%
manta-meth
Manta mETH (METH) $ 3,519.53 2.44%
saros-finance
Saros (SAROS) $ 0.020422 6.93%
masa-finance
Masa (MASA) $ 0.138099 1.26%
marinade
Marinade (MNDE) $ 0.138097 8.05%
hairdao
HairDAO (HAIR) $ 82.41 2.56%
avalanche-old-bridged-wbtc-avalanche
Avalanche Bridged WBTC (Avalanche) (WBTC) $ 97,688.17 3.86%
fimarkcoin-com
Fimarkcoin.com (FMC) $ 0.00205 0.05%
rifampicin
Rifampicin ($RIF) $ 0.052844 1.37%
shoggoth
Shoggoth (SHOGGOTH) $ 0.052832 25.16%
realio-network
Realio Network Token (RIO) $ 1.00 11.31%
orderly-network
Orderly Network (ORDER) $ 0.246932 8.62%
degen-spartan-ai
Degen Spartan AI (DEGENAI) $ 0.05249 11.87%
stader
Stader (SD) $ 0.9871 2.16%
stride
Stride (STRD) $ 0.566234 6.73%
kiki-2
KIKI (KIKI) $ 0.051946 14.85%
omisego
OMG Network (OMG) $ 0.369877 4.86%
mainframe
Mainframe (MFT) $ 0.005521 4.74%
metacade
Metacade (MCADE) $ 0.029503 6.59%
arpa
ARPA (ARPA) $ 0.052533 4.98%
tokemak
Tokemak (TOKE) $ 0.648643 6.90%
dimo
DIMO (DIMO) $ 0.184345 4.78%