When are German/ Eurozone flash PMIs and how could they affect EUR/USD?

German/ Eurozone flash PMIs Overview

Amongst the Euro are economies, the PMI reports from Germany and Eurozone as an entire bloc hold more relevance, in terms of its impact on the European currency and the markets as well.

The forecast for the Eurozone flash manufacturing PMI shows 57.1 for September, slightly lower than the 57.4 recorded a month ago, and the Eurozone services sector is expected to remain unchanged at 54.7 as seen in August.

The flash manufacturing PMI for Germany is expected to tick lower to 59.0, when compared to the final 59.3 result booked previously. While, the index for the services sector is expected to improve to 53.8 in September, against 53.5 last.

How could affect EUR/USD?

A positive surprise in the manufacturing PMI reports could offer fresh impetus to the EUR bulls, which could take the rate back above 1.2000 levels, beyond which 1.2033 (Sept 20 high) could be tested, paving way for a test of 1.2094 (2-1/2 year tops). 

On the flip side, if the readings show a big-than expected drop, the spot could drop to 1.1930/20 region, below which 1.1900 (round number) could be tested.

However, the reaction to the data releases may remain limited, as the sentiment around the Euro would be driven by the ECB President Draghi’s speech.

Key notes

Eurozone PMIs and UK PM May’s speech amongst market movers today – Danske Bank

EUR/USD advances further to 1.1970 ahead of PMIs, Draghi

About German/ Eurozone flash PMIs

The Manufacturing Purchasing Managers Index (PMI) released by the Markit Economics captures business conditions in the manufacturing sector. As the manufacturing sector dominates a large part of total GDP, the manufacturing PMI is an important indicator of business conditions and the overall economic condition in the Euro Zone. Usually a result above 50 signals is bullish for the EUR, whereas a result below 50 is seen as bearish.