EUR/GBP hovers around 0.8400, remains under pressure after PMI data releases

Source Fxstreet
  • EUR/GBP loses ground after PMI data releases from both economies.
  • The Eurozone Composite PMI eased to 50.1 in July, reaching a five-month low.
  • S&P Global Composite PMI rose to 52.7 in July from the previous reading of 52.3.

EUR/GBP extends its losses for the third successive day, trading around 0.8400 during the European hours on Wednesday. The EUR/GBP cross faces renewed selling pressure following the release of disappointing HCOB Purchasing Managers Index (PMI) data from the Eurozone and Germany.

Wednesday's data indicated a further contraction in the Eurozone's manufacturing sector, with a decline in services sector activity for July. The Eurozone Manufacturing PMI fell to 45.6 in July from 45.8 in June, missing the market consensus of 46.1 and marking a seven-month low.

The bloc’s Services PMI declined from 52.8 in June to 51.9 in July, falling short of the expectations of 53.0 and hit a four-month low. The HCOB Eurozone Composite PMI eased to 50.1 in July vs. 51.1 expected and June’s 50.9 figure. The index reached a five-month low.

The German manufacturing sector's contraction unexpectedly worsened, with the PMI dropping to 42.6 in July from 43.5 in June, significantly below the forecast of 44.0. This marks the lowest level in three months. Similarly, the services sector underperformed, with the Services PMI falling to 52.0 in July from 53.1 in June, missing market expectations of 53.1 and hitting a four-month low.

In the United Kingdom (UK), the S&P Global Composite PMI rose to 52.7 in July from the previous reading of 52.3. The Manufacturing PMI increased to 51.8 from the prior 50.9, indicating improved performance in the manufacturing sector. However, the Services PMI declined slightly to 52.4, missing the expected reading of 52.5 for July.

The reduced likelihood of an August rate cut by the Bank of England (BoE) is expected to support the British Pound (GBP) and weaken the EUR/GBP cross. Traders are awaiting the UK PMI activity survey results, which will be released during Wednesday’s London market session.

Economic Indicator

HCOB Composite PMI

The Composite Purchasing Managers’ Index (PMI), released on a monthly basis by S&P Global and Hamburg Commercial Bank (HCOB), is a leading indicator gauging private-business activity in the Eurozone for both the manufacturing and services sectors. The data is derived from surveys to senior executives. Each response is weighted according to the size of the company and its contribution to total manufacturing or services output accounted for by the sub-sector to which that company belongs. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the private economy is generally expanding, a bullish sign for the Euro (EUR). Meanwhile, a reading below 50 signals that activity is generally declining, which is seen as bearish for EUR.

Read more.

Last release: Wed Jul 24, 2024 08:00 (Prel)

Frequency: Monthly

Actual: 50.1

Consensus: 51.1

Previous: 50.9

Source: S&P Global

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
The Fed will sit still on October 28 — but 100 of 100 economists now expect a December hikeA Reuters poll run October 16-20 found 94 of 100 economists expecting the Fed to hold at 3.75-4.00% on October 28 — and all 100 expecting a hike in December, against less than half a month earlier. The market is close to the same price, with CME FedWatch at roughly 17% for October and 82.8% for December. With the Fed in blackout since October 17, here are the five dates that decide the rest of the year, what each one is priced for, and the two directions each can take.
Author  Irene Q.
Oct 22, Thu
A Reuters poll run October 16-20 found 94 of 100 economists expecting the Fed to hold at 3.75-4.00% on October 28 — and all 100 expecting a hike in December, against less than half a month earlier. The market is close to the same price, with CME FedWatch at roughly 17% for October and 82.8% for December. With the Fed in blackout since October 17, here are the five dates that decide the rest of the year, what each one is priced for, and the two directions each can take.
placeholder
Big Tech's $800 billion AI bill faces its first real test — free cash flow is the judgeAlphabet and Microsoft report after the close on October 28, Amazon on October 29, with hyperscaler AI capex running near $800 billion a year. Meta's negative free cash flow and 9.40% drop on October 22 was the warning; this week's prints decide whether cloud growth and backlog can pay for the buildout. Here are the consensus numbers, the free-cash-flow table and the two-sided test.
Author  Irene Q.
Oct 26, Mon
Alphabet and Microsoft report after the close on October 28, Amazon on October 29, with hyperscaler AI capex running near $800 billion a year. Meta's negative free cash flow and 9.40% drop on October 22 was the warning; this week's prints decide whether cloud growth and backlog can pay for the buildout. Here are the consensus numbers, the free-cash-flow table and the two-sided test.
placeholder
Tesla jumps 5% as Barclays puts a $450 target on the SpaceX merger — the chart was already pointing to 431Tesla closed at $391.62 on October 26, up 5.21%, after Barclays upgraded the stock to Overweight and lifted its target to $450 from $370, citing a sharp inflection in Robotaxi miles and a potential SpaceX merger. The move also completed a double bottom at $345.88 and $349.33, with a neckline at $388.56 and a measured target of $431.24. Here is what the upgrade actually says, why the chart and the analyst now point the same way, and what would break the target.
Author  Irene Q.
Yesterday 05: 30
Tesla closed at $391.62 on October 26, up 5.21%, after Barclays upgraded the stock to Overweight and lifted its target to $450 from $370, citing a sharp inflection in Robotaxi miles and a potential SpaceX merger. The move also completed a double bottom at $345.88 and $349.33, with a neckline at $388.56 and a measured target of $431.24. Here is what the upgrade actually says, why the chart and the analyst now point the same way, and what would break the target.
placeholder
Anthropic files for a $2 trillion IPO — the $80.7 billion loss is the decoy, the $450 billion compute bill is the riskAnthropic publicly filed its S-1 on October 26, revealing $16.29 billion of first-half revenue (+1,304% year over year) and a $80.7 billion net loss — of which $72.4 billion is a non-cash convertible-note charge. The real number is the $450 billion of signed, mostly non-cancelable compute commitments. Here is what the filing says, why NVDA, ARM and MU are the tradeable read-through, and the conditions that decide whether the AI trade passes its first public valuation test.
Author  Irene Q.
Yesterday 06: 02
Anthropic publicly filed its S-1 on October 26, revealing $16.29 billion of first-half revenue (+1,304% year over year) and a $80.7 billion net loss — of which $72.4 billion is a non-cash convertible-note charge. The real number is the $450 billion of signed, mostly non-cancelable compute commitments. Here is what the filing says, why NVDA, ARM and MU are the tradeable read-through, and the conditions that decide whether the AI trade passes its first public valuation test.
placeholder
Fed October Rate Decision Preview: Rate Hike Pause Has Become Consensus, How Will US Stocks, Dollar, and Gold React?The Federal Reserve will announce its October interest rate decision at 14:00 Eastern Time on October 28, and Fed Chair Warsh will hold a press conference at 14:30. Markets currently wide
Author  TradingKey
Yesterday 10: 21
The Federal Reserve will announce its October interest rate decision at 14:00 Eastern Time on October 28, and Fed Chair Warsh will hold a press conference at 14:30. Markets currently wide
Related Instrument
goTop
quote