Germany June flash manufacturing PMI 52.0 vs 54.0 expected


  • Prior 54.8
  • Services PMI 52.4 vs 54.5 expected
  • Prior 55.0
  • Composite PMI 51.3 vs 53.1 expected
  • Prior 53.7

After the weak French readings earlier, Germany is also suffering from a big knock to activity in June. Falling exports and strong inflation pressures weigh on economic conditions, as the outlook becomes increasingly gloomy. The manufacturing reading is a 23-month low with the services and composite readings seen at 5 month and 6 month lows respectively. Ouch.

The euro is taking an added hit from this with EUR/USD

EUR/USD

The EUR/USD is the currency pair encompassing the European Union’s single currency, the euro (symbol €, code EUR), and the dollar of the United States (symbol $, code USD). The pair’s rate indicates how many euros are needed in order to purchase one dollar. For example, when the EUR/USD is trading at 1.2, it means 1 euro is equivalent to 1.2 dollars. Why the EUR/USD is the Most Popular Trading PairCompared to all tradable currencies, the euro (EUR) is the world’s second most traded currency, behind only the US dollar. This currency pair is the most traded and liquid currency pair on the market.As the most popular trading pair, the EUR/USD is a staple of every brokerage offering and often has some of the lowest spreads relative to other pairs. Ultimately, the currency follows the two most economic blocs in the world and sees the most volume for this reason.The EUR/USD has a wide range of factors that influence its rates. From the EUR side, economic data in the Eurozone as well as internal factors in the bloc can easily impact rates. Even small member states can effectively weigh on the EUR, as seen in Greece during bailout talks in the 2010s. Alternatively, developments in the United States and the Federal Reserve commonly affect the EUR/USD. Many examples include the bailouts during the Financial crisis, tax cuts during the Trump Administration, and Covid-19 relief measures, among others.

The EUR/USD is the currency pair encompassing the European Union’s single currency, the euro (symbol €, code EUR), and the dollar of the United States (symbol $, code USD). The pair’s rate indicates how many euros are needed in order to purchase one dollar. For example, when the EUR/USD is trading at 1.2, it means 1 euro is equivalent to 1.2 dollars. Why the EUR/USD is the Most Popular Trading PairCompared to all tradable currencies, the euro (EUR) is the world’s second most traded currency, behind only the US dollar. This currency pair is the most traded and liquid currency pair on the market.As the most popular trading pair, the EUR/USD is a staple of every brokerage offering and often has some of the lowest spreads relative to other pairs. Ultimately, the currency follows the two most economic blocs in the world and sees the most volume for this reason.The EUR/USD has a wide range of factors that influence its rates. From the EUR side, economic data in the Eurozone as well as internal factors in the bloc can easily impact rates. Even small member states can effectively weigh on the EUR, as seen in Greece during bailout talks in the 2010s. Alternatively, developments in the United States and the Federal Reserve commonly affect the EUR/USD. Many examples include the bailouts during the Financial crisis, tax cuts during the Trump Administration, and Covid-19 relief measures, among others.
Read this Term falling from 1.0530 to 1.0507. The dollar is catching a broader bid alongside the yen as a result, as risk sentiment takes a knock.

S&P Global notes that:

“June’s flash PMI data show that Germany’s economy has lost virtually all the momentum gained from the easing of virus related restrictions, with growth in the service sector cooling sharply for the second month in a row in June.”

“But perhaps the biggest cause for concern is a broadbased decline in demand, with a deepening downturn in manufacturing new orders coinciding with a first fall in service sector new business for six months, as rising prices and elevated levels of uncertainty take a toll. Activity is still being supported to some extent by workloads built up earlier in the year, however.

“Price pressures remain historically elevated. However, there are signs that businesses might be finding it are difficult to pass on higher costs, with average prices charged for goods and services rising at the slowest rate for three months despite a quicker increase in input costs that the survey in part linked to rising wage pressures.

“Thanks to a particularly grim outlook for the manufacturing sector, business confidence towards future activity is now at its lowest since the first wave of the pandemic two years ago, and we’re seeing this translate into a broad-based slowdown in job creation as companies start to reassess their staffing needs going forward.”

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