On August 23, the euro remained weaker as a measure of activity in the euro zone’s manufacturing and services sectors fell to an 18-month low in August. The Eurozone Composite Purchasing Managers Index (PMI) fell to 49.2 in August from 49.9 in July, below the 50 line of growth and decline.
Economists had expected a composite PMI of 49.0. Simon Harvey, currency analyst at Monex Europe, said the data, while somewhat better than expected, suggested the euro zone economy may be in recession. Today’s data, combined with European energy price action that has deteriorated over the past week, provides euro traders with the confirmation bias they need to keep EUR/USD structurally below par in the near term.