The start of the European session trading was adorned with the publication of manufacturing and services PMI data from the European Zone and the UK in July.
Business activity in the European Zone continued to show strengthening this month, with the strongest increase in 15 years, supported by the easing of coronavirus restrictions particularly from the hospitality, transport and tourism sectors.
Meanwhile, manufacturing activity declined slightly but still showed a strengthening, despite supply chain disruptions that hampered manufacturing production.
Europe’s largest economy, Germany exhibited robust growth this month with gains in both sectors. In contrast to France, which showed a slight decline in business and manufacturing activity.
However, overall growth still showed a strengthening to start well in the third quarter.
The euro traded higher following this positive reading, but the movement displayed was limited as it was still affected by the European Central Bank's (ECB) policy announcement which remained dovish.
Meanwhile, investors in the European session were also seen with readings of PMI data from the UK which showed weaker-than-expected growth in both sectors in July.
Business activity in the UK declined to its lowest level since March, weighed down by an increase in coronavirus cases that weakened consumer demand. While manufacturing activity also declined, it was affected by supply chain disruptions that led to an increase in the prices of goods and services.
The pound again showed a decline following this disappointing reading, trading around 1.37300 against the US dollar.
