There was some good news for the Eurozone today as the latest manufacturing and services Purchasing Managers Index’s showed that those sectors contracted at a slower pace than economists had expected.
London based Markit Economics revealed that the services PMI rose to 48.2 in January, up from 47.2 in December, whereas the manufacturing PMI increased to 47.5 from 46.1. A reading below 50 indicates contraction.
Economists believe that the Eurozone will remain in recession and see further contraction before stagnating in the first quarter of 2013 before returning to growth in the second quarter. In the final three months of 2012 it is believed that the Eurozone economy shrank by 0.4%. GDP figures for that timeframe are due to be released in February.
The PMI data supports European Central Bank President Mario Draghi’s belief that the worst of the debt crisis could be over saying that the “darkest clouds” have lifted thanks to his decisive policy to ensure the Euro’s survival. Optimism over the Eurozone is riding high as the debt crisis appears to losing its grip over the regions key economies. Investor confidence in Germany reached a two-and-a- half year high this month and the ECB has predicted that the region will see steady growth later in the year.
Despite all the optimistic talk unemployment remains high and the economies of Greece and Spain remains mired deep in recession. Only when those two nations begin to show signs of growth will the Euro crisis be truly over.
These exchange rates were correct as of 10:50 am
The Pound to Euro exchange rate is currently trading at 1.1881
The Pound to US Dollar exchange rate is currently trading at 1.5838
The Pound to Australian Dollar exchange rate is currently trading at 1.5076
The Euro to US Dollar exchange rate is currently trading at 1.3323
The Euro to Pound exchange rate is currently trading at 0.8412