EUR/USD– Eurozone PMI improves to 26-month high

on Sep 2, 2013
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**iNVEZZ.com, Monday 2 September:**

Spanish Manufacturing PMI for August reported in earlier today as an improvement to 51.1, well above the median forecast of 50.1 and the prior 49.8. The reading is the first rise in output since April 2011, on the back of export expansion not seen in 32 months.
Italy’s Manufacturing PMI for August also beat the market consensus for 50.8 with a solid reading of 51.3, nearly two percent up on the July figure of 50.4. This was a 27-month high for the measure and the best rate of growth since April 2011. New orders showed accelerating expansion, likewise boosted by an upsurge in exports.

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German Manufacturing PMI for August reached a 25-month high of 51.8, but underwhelmed by undershooting the flash estimate of 52.0. The July reading had been 50.7

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Whereas the French number met expectations by staying unchanged from the prior period’s 49.7, also the preliminary projection. As measured by the PMI, France’s manufacturing sector has now remained in contractionary mode (below 50) for 18 consecutive months. Whilst new orders were apparently up in August, actual output failed to match July’s gains.

By contrast, and happily, Greek Manufacturing PMI for August edged closer to stabilisation and surged to a 44-month high of 48.7, up from 47.0 in July, when new export orders turned positive and there was slower shrinkage in finished goods.
Across the single currency region, the Final Eurozone Manufacturing PMI for August expanded to 51.4, exceeding analysts’ estimates for 51.3 and the previous 50.3. Growth rates of new orders, exports and output accelerated to the fastest since May 2011. The Netherlands, Austria and Ireland proved to be the table-toppers, while only France and Greece remained in contractionary mode.

Notably though, all surveys revealed that employment continued to decline in August, despite the widespread upturn in demand. The latest rise in the value of crude oil also affected input prices, so easing deflationary pressures.
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Markit Chief Economist Chris Williamson opined that, “policymakers will be reassured by the data, which add to growing signs of a building recovery for the eurozone economy”. Williamson cautioned though that “the fact that companies remain reluctant to take on staff suggests that there’s a long way to go before the recovery feeds through to a meaningful job market improvement’’.
Following release of the manufacturing surveys, the euro reached a new intraday high at 1.3227, but the gains have been marginal. The EUR/USD is currently changing hands just five pips shy of the intraday top, some 0.03 percent up so far today.

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