August 23, 2021

This Is What Happened To European Economic Activity In August!

 The start of the European session trading was adorned with readings of the IHS Markit manufacturing and services PMI data from the European Zone and the UK which has been the main focus of the market this week.

European Zone business activity continued to show a strengthening in August, despite recording a slight decline from the strongest reading previously recorded.

The IHS Markit survey PMI index, which is used as an indicator for economic health, reported the services sector declined slightly to 59.7 in August from 59.8 revised in July.

As for manufacturing activity, the figure was slightly off expectations and decreased from the previous reading, increasing by 61.5 this month from 62.8.

IHS Markit in its latest review noted that although growth was seen slowing this month, the data still showed stronger economic expansion in the third quarter.

The euro rose slightly following the publication of this data, trading around $ 1.1720, also supported by the decline recorded by the greenback dollar.

Moreover, investors in the European session also saw the release of data from the UK which also showed a decline in August, where both indices fell to six-month lows.

Business activity in the UK fell to its lowest level since February, with a growth record of 55.5 this month from 59.6 in June.

Meanwhile, manufacturing activity slowed slightly with an increase of 60.1 from 60.4 previously recorded, but better than expected to increase 59.5.

IHS Markit said although the PMI showed the economy continued to grow this month, there were signs that the recovery was losing momentum in the third quarter after a strong second quarter.

The pound changed little as a result of the release of this data, with price movement limited to around 1.3655 against the US dollar.