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German Manufacturing PMI

Discussion in 'Economic Indicator Descriptions' started by Felix Homogratus, Nov 29, 2009.

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  1. Felix Homogratus

    Felix Homogratus Commander in Chief

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    German Manufacturing PMI comes out twice per month.

    PMI stands for Purchasing Managers Index. What they do is survey executives in manufacturing industry by asking them a series of questions about their expectations for production, new orders, deliveries, employment, and inventories, such as are you planning to fire, hire, or stay unchanged on new workers in the near future? Then they average out all the answers, and they get a number anywhere between 1 and 100.

    A number of 50 means that on average, the manufacturing industry in Germany did not improve over previously measured month. A number above 50 means that the manufacturing industry expanded over previously measured month. A number below 50 means that the manufacturing industry contracted over previously measured month.

    Germany is a manufacturing heartland of Euro Zone, so this number affects EUR/USD and other Euro pairs.

    A better than expected number is usually good for Euro, so EUR/USD tends to go up. A worse than expected number is usually bad for Euro, so EUR/USD tends to go down.

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