Morning Forex Fundamental: EUR

Morning Forex Fundamental: EUR

'Germany, the Netherlands, Austria, Spain and Italy are now all seeing manufacturing grow at the fastest rates for at least two years, and even Greece saw a marked easing in the rate of manufacturing decline' - Chris Williamson, chief economist at Markit

Eurozone manufacturing recovery gathered pace last month, with manufacturing PMI hitting the highest since June 2011, as the sector expanded across the majority of European countries, including struggling to grow Spain and Italy. A measure of manufacturing activity rose to 51.4 in August, from 50.3 a month earlier, above estimates of 51.3 points. Markit also provided separate PMI figures for a number of European countries, showing activity in Europe's powerhouse, Germany grew to 51.8 in August, worse than the median estimate of 52.0 points. Among other major economic, activity in the French sector remained unchanged, while manufacturing activity in Italy and Spain jumped to 51.3 and 51.1, respectively.

Looking ahead, the majority of manufacturers expect that the confidence in most Eurozone countries should urge businesses to increase spending, also encouraging consumers to spend more, particularly on durable goods. Furthermore, manufacturing data is allaying some fears the 17-nation economy may contract once again and supporting hopes the area is gradually establishing recovery after exiting prolonged recession in the last quarter. Meanwhile, Mario Draghi is expected to stay pat on monetary policy during monthly policy meeting, which is scheduled on September 5.