The Eurozone Composite PMI has dropped to a five-month low of 50.1 in July, leading to a decline in the EUR/GBP cross for the third consecutive day. On the other hand, the S&P Global Composite PMI in the UK has risen to 52.7, indicating a slightly better performance in the British economy.
The recent data from the Eurozone and Germany has shown a contraction in manufacturing and services sectors, with PMI figures falling below market expectations. In contrast, the UK’s PMI data has shown a mixed result, with a rise in Manufacturing PMI but a slight decline in Services PMI.
The Bank of England’s reduced likelihood of an August rate cut is expected to strengthen the British Pound and weaken the EUR/GBP cross even further. Traders are now eagerly waiting for the UK PMI activity survey results to be released during Wednesday’s London market session.
Expert Analysis:
The Composite Purchasing Managers’ Index (PMI) is a crucial indicator that gauges private-business activity in the Eurozone and UK economies. The recent data suggests a weakening economic activity in the Eurozone, while the UK shows signs of stability. A lower PMI indicates a declining economy, which could have bearish implications for the Euro and bullish implications for the British Pound.