2013-03-05 10:42:29 Forex News – Euro rises after improved PMI’s
March 5, 2013 10:42 am
The euro rose to a session high of $1.3074 after satisfactory numbers from the Purchasing Managers’ Index (PMI). Germany showed the best improvement, with its services PMI remaining in expansion territory at 54.7, up from a previous 54.1 points and beating expectations.
Germany accounts for about 30 percent of euro zone output so the data was important. Germany is seen as Europe’s powerhouse, and is looked upon to help keep the euro zone afloat.
Other PMI’s from other euro zone countries provided relief that euro zone business surveys were not as bad as previously expected.
Euro zone services and composite PMI figures came in at 47.9, slightly above expectations at 47.3, though it was still well below the 50 mark, which demarcates growth from contraction.
Chris Williamson, chief economist at survey compiler Markit said the latest surveys were consistent with the euro zone economy shrinking around 0.2 percent this quarter, with only German strength saving the bloc from a downturn as bad as the 0.6 percent decline at the end of last year.
Williamson said that the gap between Germany and France, the euro zone’s two largest economies, has grown to its widest since the survey started in 1998.
Meanwhile Spanish PMI was disappointing, coming in lower than expected, showing businesses in Spain endured another dire month, as the nation still struggles to recover from the debt crisis.
“The outlook … seems to largely depend on whether Germany can continue to expand and offset the weakness in France, Italy and Spain,” said Williamson.
“(That) seems a tall order, meaning hopes of a return to growth for the region by mid-2013 are now looking too optimistic.”
The euro rose to a session high of $1.3074 after satisfactory numbers from the Purchasing Managers’ Index (PMI). Germany showed the best improvement, with its services PMI remaining in expansion territory at 54.7, up from a previous 54.1 points and beating expectations.
Germany accounts for about 30 percent of euro zone output so the data was important. Germany is seen as Europe’s powerhouse, and is looked upon to help keep the euro zone afloat.
Other PMI’s from other euro zone countries provided relief that euro zone business surveys were not as bad as previously expected.
Euro zone services and composite PMI figures came in at 47.9, slightly above expectations at 47.3, though it was still well below the 50 mark, which demarcates growth from contraction.
Chris Williamson, chief economist at survey compiler Markit said the latest surveys were consistent with the euro zone economy shrinking around 0.2 percent this quarter, with only German strength saving the bloc from a downturn as bad as the 0.6 percent decline at the end of last year.
Williamson said that the gap between Germany and France, the euro zone’s two largest economies, has grown to its widest since the survey started in 1998.
Meanwhile Spanish PMI was disappointing, coming in lower than expected, showing businesses in Spain endured another dire month, as the nation still struggles to recover from the debt crisis.
“The outlook … seems to largely depend on whether Germany can continue to expand and offset the weakness in France, Italy and Spain,” said Williamson.
“(That) seems a tall order, meaning hopes of a return to growth for the region by mid-2013 are now looking too optimistic.”
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