Forex News – Eurozone Services PMI higher than expected

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Forex News – USD pulls off from 3 year low as Euro closes in on recent highsThe May Eurozone Services PMI Business Activity Index came in above its earlier flash estimate of 55.4 to record a reading of 56.0. April figure was revised from 55.7 to 55.4.

The Business activity index is compiled by Markit survey organization, and calculates the changes in the activities of around 2,000 companies ranging from banks to hotels

The index has remained above the neutral 50.0 mark, signalling expansion, every month since September 2009.

However, Markit mentioned caution should be take for still-worsening disparities between a strong Franco-German euro zone core, and debt-burdened peripheral members, especially Greece.

“Despite slowing, services growth remains robust and the sector should still make a significant contribution to economic growth in the second quarter,” said Chris Williamson, Markit’s chief economist.

“However, the rate of growth looks likely to slip further in coming months, as indicated by business confidence sliding to the weakest for a year-and-a-half and new business rising at the slowest pace for five months.

“ The euro zone economy’s 0.8 percent quarter-on-quarter expansion estimated for the first three months of the year could be as good as it gets for this year”, Williamson added.

Upon release of the data at 07:58GMT, the Euro edged up against the Dollar from 1.4476 to 1.4486.