The euro zone saw increased economic activity in July according to the euro zone flash composite PMI readings on Wednesday. This is the first reported expansion in the euro zone since January 2012. Analysts, however, continued to warn that the region faced severe headwinds in the coming months which could impede and even reverse, the region's return to growth.
The purchasing managers index for July came in at 50. versus forecasts of 49.1 and June's reading of 48.7. A reading above 50 indicates an expansion of output. News of the rally sent the euro to a one-month high against the dollar.
Activity in the euro zone's largest economies, France and German, also improved in July, with business in the private sector in both Germany and France performing better than expectations. France's composite PMI was at a 17-month high with a reading of 48.8 up from 47.4 in June. Meanwhile, Germany's composite figure came in at 52.8 from 50.4 in June.
"This is a very strong number,” Chris Williamson, chief economist at Markit said.”Iit was surprisingly strong across the board.” According to Williamson, Germany is leading the growth with strong growth in manufacturing and services. And manufacturing has returned to France, which has been a weak spot in these surveys.
Euro rallies EuroZone Business Swell
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