German Preliminary Manufacturing PMI drops to 43.4 in June vs. 46.4 expected

• Germany’s Manufacturing PMI dipped to 43.4 in June vs. 46.4 estimate.
• Services PMI for the German economy fell to 53.5 in June vs. 54.4 forecast.
• EUR/USD falls further below 1.0700 after weak German PMIs.

The German manufacturing sector contraction unexpectedly deepened in June while the services sector also lost its expansionary momentum, the preliminary business activity report published by the HCOB survey showed Friday.

The HCOB Manufacturing PMI in the Eurozone’s economic powerhouse arrived at 43.4 this month, deteriorating from May’s 45.4 while much below the expected 46.4 readout. The index tripped to the lowest level in two months.

Meanwhile, Services PMI fell from 54.2 in May to 53.5 in June, missing the market expectations of 54.4 in the reported period. The measure also hit a two-month low.

The HCOB Preliminary German Composite Output Index came in at 50.6 in June vs. 52.7 estimated and 52.4 reported in May. The gauge was at its weakest in two months.

FX implications

EUR/USD has come under renewed selling pressure on the disappointing German data, currently trading 0.22% lower on the day at 1.0675.