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Euro area business activity improves on progress in services

Euro area business activity improves on progress in services

The Purchasing Managers’ Index data released on Wednesday showed an improvement in the euro area business activity in August.

The Composite PMI index of manufacturing and services recorded 51.9 in August, up from a preliminary of 51.8 and July’s reading of 51.5, according to IHS Markit data.

The manufacturing sector has signaled a contraction for seven months in a row, yet the services PMI surged to 53.5 last month from 53.2 in July.

“The latest reading indicates that GDP will rise by just 0.2% in the third quarter, assuming no substantial change in September. Official data available so far for the quarter suggest growth could be even weaker,” said Chris Williamson, Chief Business Economist at IHS Markit.

Still, there are mounting speculations the ECB would announce the restart of its bond purchases program during the policy meeting on September 12.

As of 08:23 GMT, the euro held its gains as it traded at $1.0988 after hitting a high of $1.0996, noting that it fell to its lowest level since May 2017 on Tuesday.

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