Euro area flash PMIs remain strong in January, economy continues to expand robustly

The euro area economy continues to expand robustly. The flash purchasing managers’ index for services for the month of January rose 1 point to 57.6, the highest level since 2007. Meanwhile, the purchasing managers’ index for manufacturing dropped in the month to 59.6 from 60.6; however, it continues to be at a very high level.

In the past, such high manufacturing PMI have accompanied a rise in real GDP of more than 0.75 percent. Against this background, the real GDP is expected to have risen 0.6 percent in the fourth quarter of 2017 and is likely to come in at the similar pace in the first quarter of 2018, noted Commerzbank in a research report.

The data released today affirmed the projection that at 2.5 percent, the economy would record much stronger growth in 2018 than the majority of economists expect. The European Central Bank’s expansionary monetary policy is having an increasing effect on the real economy. And the external economic environment remains favorable. Even if the euro’s recent appreciation is being a drag on price competitiveness of companies producing in the euro area, this negative effect should be compensate by lively global demand, stated Commerzbank.

At 17:00 GMT the FxWirePro's Hourly Strength Index of Euro was neutral 21.0041, while the FxWirePro's Hourly Strength Index of US Dollar was bearish at -89.8464. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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