Today, data on activity in the manufacturing sector of China came out, which did not put serious pressure on commodity currencies, although they were worse than forecasts.
According to a report by Caixin Media Co., in December 2018, compared to November, activity in China's manufacturing sector decreased. The final PMI purchasing managers' index for China's manufacturing sector was below 50 points (when activity is declining) and amounted to 49.7 points against 50.2 points in November, the companies said. The index fell below 50 for the first time since may 2017.
As stated in Markit, China's manufacturing sector in December last year faced a weakening of domestic demand.
Already in the first half of the day, the European currency fell from the highs of December last year, which came close against the background of low trading volume. The pressure on the euro increased after a report was issued by the Markit agency on activity in the manufacturing sector of leading European countries, as well as in the eurozone.
As you can see on the chart, the Purchasing Managers' Index (PMI) for the manufacturing sector of Italy remained below 50 points in December and amounted to 49.2 points, whereas in November it was 48.6 points. Economists had expected Italy's manufacturing PMI to be at 48.4 points.
Data for France indicated a slowdown in the manufacturing sector. The Markit report indicated that Purchasing Managers' Index (PMI) for the manufacturing sector in France in December last year dropped below 50 points and was 49.7 points versus 50.8 points in November. Economists had expected the manufacturing PMI of France to be at 49.7 points.
The only hope left is the flagship economy of the eurozone - Germany. There, the index of supply managers of PMI for the German manufacturing sector in December remained above 50 points and amounted to 51.5 points against 51.8 points in November. Economists had expected Germany's manufacturing PMI to be at 51.5 points.
As for the eurozone itself, then the Purchasing Managers' Index for the manufacturing sector in December dropped to 51.4 points, but remained above 50 points, which indicates that activity, though weak, is increasing. Eurozone manufacturing PMI in December was projected at 51.4 points.
The British pound fell against the US dollar, even though the PMI for the UK manufacturing sector hit a 6-month high in December. The growth of the index was due to the activity of buyers who provided the company with orders. As indicated in the report, the PMI index for the UK manufacturing sector rose to 54.2 points in December, while in November the figure was 53.1 points. Market participants were expecting a decline to 52.5 points in December.
The material has been provided by InstaForex Company - www.instaforex.com