When are German/ Eurozone flash PMIs and how could they affect EUR/USD?

German/Eurozone flash PMIs Overview

The flash version of the German/Eurozone PMI prints will draw plenty of market attention on Thursday and influence the shared currency ahead of the crucial German federal elections. Against the backdrop of lingering concerns about a global economic slowdown, the data will set the tone going into the final quarter of the year.

The preliminary data for September is expected to show a strong pickup in the manufacturing and services sector activity. The gauge for the German manufacturing sector is expected to rise from 62.6 in August to 65 during the reported month. The Eurozone flash Manufacturing PMI is anticipated to edge higher to 62 in September from 61.4 previous and the forecast for the Services PMI points to a slight improvement to 59.8 from 59 in August.

How could they affect EUR/USD?

Ahead of the key data, the emergence of some fresh selling around the US dollar assisted the EUR/USD pair to stage a goodish rebound from the post-FOMC swing lows to the lowest level since August 23. Stronger than expected readings should provide an additional boost to the common currency and push the pair back towards the 1.1750 supply zone.

Conversely, weaker prints might do little to prompt any selling amid the prevalent risk-on environment, which might continue to act as a headwind for the safe-haven greenback. This, in turn, suggests that the path of least resistance for the pair is to the upside, though some caution is warranted ahead of the German elections on Sunday.

Key Notes

  •  EUR/USD: Off five-week low to regain 1.1700 ahead of Eurozone, US PMI

  •  EUR/USD testing $1.17, reinforced by daily support at $1.1689

  •  EUR/USD targets the 1.1664 August low – Commerzbank

About German/ Eurozone flash PMIs

The Manufacturing Purchasing Managers Index (PMI) released by Markit Economics captures business conditions in the manufacturing sector. As the manufacturing sector dominates a large part of total GDP, the manufacturing PMI is an important indicator of business conditions and the overall economic condition in the Euro Zone. Usually, a result above 50 signals is bullish for the EUR, whereas a result below 50 is seen as bearish.