EUR Sinks On Worsening Economic Data

By Staff of Admiral Markets

Access To Financial Markets Made Easy • Aug 21, 2020 at 7:47 AM EDT

The euro dropped against all other major currencies as Germany and France posted disappointing Services PMI (Purchasing Manger's Index) figures showing that the Eurozone's recovery is losing momentum.

The euro dropped against all other major currencies as Germany and France posted disappointing Services PMI (Purchasing Manger's Index) figures showing that the Eurozone's recovery is losing momentum. The broader European Services PMI figures, often seen as a barometer of economic health, fell to 50.1 against an expected rise to 54.6.

EUR sinks on worsening economic data

After the easing of lockdown restrictions last month, activity in the Eurozone rose at its fastest rate since the middle of 2018. The significant drop in the services data will likely concern policymakers on the momentum of a potential economic recovery. A number above 50 does represent an expansion but the number missed every single forecast.

Andrew Harker, the Economics Director at IHS Markit which produces the figures said: "The euro zone's rebound lost momentum in August, highlighting the inherent demand weakness caused by the COVID-19 pandemic."

The slowdown in the services sector due to a lack of demand has also led to a lower headcount which has forced the employment index to fall to 47.7 from 47.9 - another concern for policymakers. The only shining light was an improving manufacturing sector but only for Germany.

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