EUR/USD: PMIs triggering profit-taking

Weaker than expected US Markit PMI triggers some profit-taking ahead of the weekend. German business confidence tumbled, while EU data continues to indicate weak growth, Valeria Bednarik from FXStreet reports. 

Key quotes

“The German manufacturing index rose to 47.8, better than the previous 45.3, although services output contracted to 53.3. The EU indexes were a bit more encouraging, as both beat the market’s forecasts. However, inflation in the Union was confirmed at 1.4% YoY in January. The numbers reflect the fragility of the EU’s economy.”

“On a downward trend now, the Markit estimates of February preliminary PMI missed the market’s expectations. The manufacturing index came in at 50.8 while services output fell into contraction territory down to 49.4 from 53.4.”

“The upcoming week will bring Q4 GDP revisions for Germany and the US. On Monday, Germany will release the IFO Business Climate index for February, foreseen at 96 from the previous 95.9. German will also publish the last version of January inflation while the Union will unveil February Consumer Confidence.

“The US macroeconomic calendar will include Durable Goods Orders scheduled for Thursday and seen down by -1.5% and the January Core PCE Price Index, Fed’s favourite inflation measure, previously at 1.6%.”