EUR/USD has recorded small losses in the Wednesday session. Currently, the pair is trading at 1.1577, down 0.04% on the day. On the release front, Eurozone and German Services PMI reports rose slightly in August. The eurozone release improved to 55.4, matching the forecast. German Services PMI climbed to 55.0, but missed the forecast of 55.2 points. In the U.S. the sole event is Trade Balance. On Thursday, Germany releases factory orders, while the U.S publishes key employment and services reports.
PMI reports are important snapshots of the strength of the economy and are closely monitored by investors. Although this week’s services and manufacturing PMI reports continue to point to expansion, the mood remains one of concern, given that the indicators have been falling short of estimates, and in some cases pointing to a downward trend. Services PMI releases in the eurozone and Germany improved in August. Eurozone Services PMI edged up from 54.2 to 54.4, while the German release climbed from 54.1 to 55.0 points. Although there are respectable numbers which point to expansion, there is some concern, as the German release missed the forecast for a second straight month.
On the manufacturing front, PMI numbers are also raising concerns. This was particularly evident in Eurozone Final Manufacturing PMI, which lost ground for an eighth straight month. The reading of 54.6, which matched the estimate, marked the lowest level since November 2016. In Germany, Final Manufacturing PMI fell from 56.9 to 55.9. Although this is a respectable reading, it is significantly lower than the readings we saw early in 2018, when the indicator was above the 60-level. German manufacturers remain generally optimistic, but have growing concerns over tariffs which the U.S has slapped on China and the EU.
