German Preliminary Manufacturing PMI improves to 39.1 in August vs. 38.7 expected

• Germany’s Manufacturing PMI rises to 39.1  in August vs. 38.7 expected.
• Services PMI for the German economy contracts to 47.3 in August vs. 51.5 expected.
• EUR/USD drops below 1.0850 on mixed German PMIs.

Germany’s manufacturing downturn eased in August while the services sector entered contraction, the preliminary business activity report from the HCOB survey showed on Wednesday.

The HCOB Manufacturing PMI in Eurozone’s biggest economy came in at 39.1 this month, as against the 38.7 expectations and 38.8 figure reported in July. The index hit its highest level in two months.

Meanwhile, Services PMI dropped sharply from 52.3 in July to 47.3 in August. The market estimated a 51.5 reading. The measure reached a fresh nine-month low.

The HCOB Preliminary German Composite Output Index arrived at 44.7 in August vs. 48.3 forecast and July’s 48.5. The gauge registered a 39-month low.

FX implications

EUR/USD is turning south, extending the drop toward 1.0800 on the mixed German data. The pair is trading 0.25% lower at 1.0815, at the time of writing.