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Following the failure of breaking over 1.4825 throughout the overnight session, the euro merged to dip under 1.4700. Undeniably, the economic docket for the Euro-Zone increased bearish sentiment for the euro as industries and services contracted for the 4th following month in September. The lackluster data has obviously reflected on the development stance for the EZ, and circumstances might only get poorer as Europe’s biggest economy is on the threshold of a recession.
The Euro-Zone manufacturing PMI fell to a record low reading of 45.3 from 47.6, whilst the services PMI went down to an record low of 48.2 from 48.5 in August. In the meantime, manufacturing activity in Germany constricted for the 2nd straight month, going down to a fresh record low of 48.1 from 49.7. Likewise, the service division constricted for the 1st time in 7 months as the index went down to 49.3 from 51.4. Sluggish increase has increased recessionary anxieties as German economy constricted in the 2nd quarter, and might stay submissive for the rest of the year as foreign and domestic demands weakened. In the middle of increasing escalation concerns for the EZ, ECB officials keep on holding a hawkish position for inflation as President Trichet pressured that keeping price constancy is the key focus for the central bank. He continued to point out that the bank if cautiously observing secondary inflation, which indicates that the ECB is not requiring lower rates any time soon. In the meantime, manufacturing new orders bounced back in July, going up to 1.6% from the record low reading of -7.2% in June.
15:18
Posted on Sep-24-2008
