The deepening economic downturn in Germany has seen both manufacturing and services activity shrink this month, according to a recent survey. Report data revealed that while the decrease in manufacturing output has tempered, the services sector experienced its sharpest decline in five months. The HCOB German Flash Composite Purchasing Managers’ Index (PMI) slid for the seventh successive month to 47.1 in January, falling short of the anticipated 47.8. A score below 50 signifies a contraction in business activity. Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, noted that the start of the year has been slow for Germany. Despite potential issues with Red Sea re-routings impacting the manufacturing sector’s supply chains, they have not excessively influenced the aggregate unit costs of consumer goods. However, inflation remains a significant concern in the service sector.
The EURUSD currency pair remains in a tight range above the 1.0900 support level on Monday as it struggles for direction. Investors seek fresh cues at the start of a busy data week, which may indicate how much the Federal Reserve will cut interest rates in September.
