Forex: EUR/GBP trades higher on PMI data

on Jan 23, 2014
Updated: Oct 21, 2019
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_iNVEZZ.com: Thursday, January 23rd:_ Markit today released its Purchasing Managers Index (PMI) for the Eurozone, Germany and France. As a result of the data, the EUR/GBP rose 0.40 percent to an intraday high of 0.8219.

The Flash Eurozone PMI Composite Output Index jumped to 53.2 points this month from 52.1 in December and reached a 31-month high. Meanwhile, the Flash Eurozone Services PMI Activity Index increased to 51.9 from December’s 51.0 points, establishing a four-month high. The Flash Eurozone Manufacturing PMI rose to 53.9 points this month from the prior 52.7 hitting a 32-month high. The Flash Eurozone Manufacturing PMI Output Index stood at 56.7 points in the current month, higher than the previous 54.9 and reaching a 33-month high.

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Markit chief economist Chris Williamson comments that “The Eurozone’s recovery gained further momentum in January. The upturn in the PMI puts the region on course for a 0.4-0.5% expansion of GDP in the first quarter, as a 0.6-0.7% expansion in Germany helps offset a flat-looking picture in France.”
The German Flash Composite Output Index climbed to 55.9 from 55.0 points in December reaching a 31-month high. The German Flash Services Activity Index rose to 53.6 points this month from 53.5 in the prior to a two-month high. The German Flash Manufacturing PMI came in at 56.3 points, up from 54.3 last month, hitting a 32-month high. The German Flash Manufacturing Output Index was at 60.4, rising from 57.9 points in December, and its highest level for the past 33 months.

Markit economist Oliver Kolodseike says that “Germany’s private sector continued to hit high notes at the start of 2014, expanding at the quickest pace since June 2011. Manufacturing was a particularly bright spot, with companies reporting sharp and accelerated growth of output and new orders.”
All French data hit a three month peak. The French Flash Composite Output Index increased to 48.5 points this month from 47.3 in December. The French Flash Services Activity Index climbed to 48.6 from the prior 47.8points. The French Flash Manufacturing Output Index rose to 48.2 from 45.2 points, and the French Flash Manufacturing PMI was up to 48.8 points from 47.0 in December.

Markit senior economist Jack Kennedy remarks that “weakness in the French private sector persisted in January, with output falling further, albeit at a reduced rate”.
A separate report from Spain showed that the unemployment rate rose to 26.3 percent in the last quarter of 2013 from 25.98 in the previous quarter. Forecasts were for a rate of 26.0 percent.

The European Central Bank today announced that the Eurozone’s Current Account was in surplus of €23.5 billion in November.
The Confederation of British Industry today reported that its Realized Sales Index fell significantly to 14 points this month from the prior level of 34. However, the Index still remains above the zero-level, indicating higher sales volumes.
Currently, the EUR/GBP is trading at 0.8212, slightly below the 89-hour simple moving average, which is at the moment acting as resistance.
Resistances today: 0.8220, 0.8240 and 0.8260.
Supports: 0.8200, 0.8180 and 0.8170.

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