Data released today by the euro area showed that companies have suffered another devastating contraction in service sector activity during May, but indicators show that the worst is over after the improvement in comparison with April readings, but a full recovery may need months to materialize.
The Eurozone Services PMI for May recorded 30.5 compared to both expectations and the previous reading of 28.7.
The Composite PMI including both manufacturing and service sectors, which is a measure of the performance of business activities, recorded 30.9 last month from a previous of 13.6, which was the lowest reading recorded by the index since compiling data for the first time in 1998.
Governments across the eurozone are gradually beginning to lift the stringent closures imposed to contain the spread of the new coronavirus, which has infected nearly 6.4 million people and killed more than 379,000.
Consequently, the Eurozone GDP is expected to drop at an unprecedented rate in the second quarter of this year, accompanied by the largest unemployment increase seen in the history of the Eurozone.
The euro continued to rise against the dollar for a third week in a row, as it recorded today the highest level in almost 11 weeks at 1.1226 after opening today's trading at 1.1166.
In Britain, the IHS Markit Composite PMI, which brings together the huge service sector and the manufacturing, rose to 30.0 from 13.8 in April, up from May's preliminary reading of 28.9.
The services index alone was slightly higher than the initial figure, at 29.0, but it is still the second weakest record after the April collapse to 13.4.
As for the pound
sterling, it rose against the dollar to register its highest level in 5 weeks
during today's session at 1.2610 after it opened at 1.2545.