EUR/GBP Continues to Decline Following Disappointing PMI Data
- UK Manufacturing PMI Falls Below Expectations
- Eurozone Composite PMI Hits Eight-Month Low
EUR/GBP is on a losing streak for the fourth consecutive day after the release of lower-than-expected Purchasing Managers Index (PMI) data from both the Eurozone and the UK. The currency pair is currently trading around 0.8360 during the European trading session on Monday.
UK PMI Data
The preliminary S&P Global/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) dropped to 51.5 in September from 52.5 in August, missing the market forecast of 52.3. Additionally, the Services PMI also decreased to 52.8 in September from 53.7 in August, falling below the expected 53.5.
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, mentioned that the slight cooling of output growth in September should not be a major concern.
Eurozone PMI Data
In the Eurozone, the HCOB Composite PMI declined to 48.9 in September from 51.0 in August, significantly lower than the expected 50.6, marking an eight-month low. The Services PMI plummeted to 50.5 from 52.9 in August, well below the market forecast of 52.4. Meanwhile, the Manufacturing PMI also saw a decline from 45.8 in August to 44.8 in September, missing the expected 45.6 and reaching a nine-month low.
ECB President Christine Lagarde emphasized the need for adaptable monetary policy in a rapidly changing global economy, stating that central banks must be flexible in response to evolving challenges.
Economic Indicator: S&P Global/CIPS Manufacturing PMI
The Manufacturing Purchasing Managers Index (PMI) is a leading indicator that assesses business activity in the UK’s manufacturing sector. It is released monthly by the Chartered Institute of Procurement & Supply and S&P Global. The index ranges from 0 to 100, with levels above 50 indicating expansion and levels below 50 signaling contraction. The latest data can influence trends in GDP, industrial production, employment, and inflation.
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Last Release: Mon Sep 23, 2024 08:30 (Prel)
Frequency: Monthly
Actual: 51.5
Consensus: 52.3
Previous: 52.5
Source: S&P Global
Analysis
The decline in PMI data from both the UK and Eurozone indicates a slowdown in economic activity, raising concerns about future growth prospects. A lower PMI suggests decreased business activity and can impact various sectors, including manufacturing and services.
Investors and policymakers closely monitor PMI data as it provides insights into the overall health of the economy. A decline in PMI figures may lead to adjustments in monetary policy and investment decisions. Understanding these indicators is crucial for anyone interested in financial markets and economic trends.