(MENAFN– ecpulse) Euro area manufacturing showed a narrowing expansion in August to raise recovery concerns ahead of ECB monetary policy this week.
PMI manufacturing came in at 50.7 last month from 51.8 in July, lower than median forecasts of 50.8.
In Germany, the manufacturing sector narrowed expansion to 51.4 in August from 52.4, while French PMI manufacturing slipped to 46.9 from 47.8.
The same gauge in Italy signaled a turn to contraction in August after recording 49.8, following a 51.9 expansion in July.
The 18-nation region economy growth stalled in the second quarter on drop in Germany and Italy as well as the stall in France.
Recovery threats are escalating from the heightening tensions between Ukraine and Russia, and its ripple effects on West sanctions on Russia and Moscow’s response to these sanctions.
Data released last week showed that euro area economic confidence dropped more than forecasts in August to 100.6 from a revised of 102.1.
The ECB decided in June to cut its key interest rates, targeted longer-term refinancing operations, preparatory work related to outright purchases of asset-backed securities and a prolongation of fixed rate, full allotment tender procedures.
Draghi has hinted that the bank would intervene by introducing new measures if inflation outlook worsened.
Inflation data released last week showed CPI estimate for the year ended August dipped to 0.3 percent, it weakest level since October 2009, from 0.4 percent in July.
All eyes will focus on the ECB monetary decision on Thursday amid expectations of seeing a fresh round of QE measures.
The ECB is ready to adjust its monetary stance further if needed and boost bank liquidity, ECB executive board member Benoit Coeure told Greek newspaper Ta Nea on Saturday.
As of 08:08 GMT, the EURUSD traded slightly higher around 1.3136 after setting a low of 1.3117.
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