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Release Explanation: As an indicator of economic performance, the PMI has the ability to easily affect currency valuations as institutions re-align existing positions, or build new, on the strength of these reports. It measures the activity level of purchasing managers, who are surveyed on production, employment, inventories, orders, and delivery data.” The PMI is split into reads on manufacturing, service, and construction industries. A read over 50 denotes growth,” TheLFB-Forex.com Trade Team members said.
TheLFB-Forex.com Trade Desk Thoughts: The PMI release shows the euro-area manufacturing side of the economy has contracted for twelve consecutive months, although the pace of contraction has slowed lately. The release number of 40.7 is slightly higher than what analysts expected. ”The PMI release shows that the contraction seen in the Euro-area manufacturing sector had lost some of its steam, something that had been widely expected and anticipated by the equity market,” TheLFB-Forex.com Trade Team said.
Forex Technical Reaction: The euro gained more than 100 pips during the European session, reaching the highest level since December 2008.
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