Eurozone Manufacturing PMI Disappoints, Sending Euro Lower

The latest reading for eurozone manufacturing PMI was a bit disappointing, underscoring the difficulties the eurozone continues to face in its economic recovery. On top of that, the news that the United Kingdom might leave the European Union is weighing, even though the United Kingdom isn’t part of the euro area.

Manufacturing PMI for the eurozone, reports Markit, came in at 50.6 for October. This is below the initial estimate and the expectation, but still represents an improvement over September. Many are still clinging to the idea that the eurozone is in a state of expansion, but the rate is so slow that it is slipping toward contraction.
Not only that, but some are worried about the precedent if the United Kingdom leaves the European Union. There have been rumblings about the possibility. Even though the United Kingdom isn’t part of the currency union, it is still part of the political organization of Europe, and there would be consequences if it left.
For now, the euro is mostly lower on the news, dropping against many of its major counterparts.
At 11:15 GMT EUR/USD is down to 1.2491 from the open at 1.2503. EUR/GBP is also lower, down to 0.7808 form the open at 0.7830. EUR/JPY is higher, thanks to general yen weakness, gaining to 141.6320 from the open at 141.0550.

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