German Preliminary Manufacturing PMI contracts further to 38.8 in July vs. 41.0 expected

• Germany’s Manufacturing PMI arrives at 38.8 in July vs. 41.0 expected.
• Services PMI in Europe’s economic powerhouse drops to 52.0 in July vs. 53.1 expected.
• EUR/USD drops below 1.1100 on disappointing German PMIs.

Germany’s manufacturing downturn extended into July while the services sector slowdown continued, according to the preliminary business activity report from the HCOB survey published on Monday.

The Manufacturing PMI in Eurozone’s economic powerhouse came in at 38.8 this month, compared with 41.0 expected and 40.6 previous figure. The index hit its lowest level in 38 months.

Meanwhile, Services PMI dropped further from 54.1 in June to 52.0 in July. The market consensus was for a 53.1 reading. The PMI reached a fresh five-month low.

The HCOB Preliminary Germany Composite Output Index arrived at 48.3 in July vs. 50.3 estimates and June’s 50.6. The gauge recorded an eight-month low.

FX implications

EUR/USD is extending the drop below 1.1100 on the downbeat German data. The pair is trading 0.30% lower at 1.1085, at the time of writing.