The European economic crisis is spreading from industry to services. This is the most worrying data and has pushed the euro to its lowest level against the dollar in almost two years . This is reported by the PMI index (which “captures” the orientations of company purchasing managers) for November, which was below expectations. As for the manufacturing sector of the euro area, the index stood at 45.2 points in November, against the 46 expected. In the services sector, it is at 49.2 compared to the 51.6 estimated (where 50 is the threshold that separates an expansionary phase from a contraction ).
The euro was weakened by the downward revision of the German GDP data for the third quarter . Growth was 0.1% compared to the previous quarter and not 0.2% as initially estimated. The European Central Bank is now betting on more decisive action , with a 50 basis point cut in the cost of money in December (another element that weakens the euro).
The ECB reserves further interest rate cuts for the coming months, faced with an inflation target of 2% that should be reached by mid-2025, Bundesbank (German central bank) governor Joachim Nagel said in the afternoon . On the inflation front, however, watch out for the price of gas, which has returned to its highest value in a year and is unlikely to fall in the coming months.