EUR/USD Drops as Eurozone PMI Hits 48.9, Signaling Escalating Recession Fears

Composite PMI Falls Below Expectations

HCOB’s preliminary composite eurozone PMI, compiled by S&P Global, dropped to 48.9 in September from 51.0 in August. This marked the first contraction since February, with the index falling below the 50-point threshold that separates growth from contraction. Economists had expected the index to only dip to 50.5, according to a Reuters poll.

The unexpected contraction points to weaker demand across the eurozone, with new orders falling at the fastest rate in eight months. The new business index dropped to 47.2 from 49.1, further highlighting the severity of the slowdown. Chief Economist at Hamburg Commercial Bank, Cyrus de la Rubia, commented, “It doesn’t take much imagination to foresee a further weakening of the economy,” given the declining order backlogs and new business figures.