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Ireland AIB Services PMI Hits 50.8, Euro Edges Higher
Ireland's services sector returned to growth in May with AIB PMI at 50.8, reinforcing the case for steady ECB policy and offering a near-term floor under the euro.
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The Ireland AIB Services PMI climbed to 50.8 in May from 49.7 in April, crossing the expansion threshold for the first time in two months. The index measures activity across Ireland's dominant services sector, which accounts for roughly 70% of the country's economic output.
The move into expansion territory carries outsized weight for EUR/USD because Ireland is the most export-oriented economy in the eurozone. A services-sector pickup signals that domestic demand remains resilient even as manufacturing weakens. That resilience reduces the odds of an aggressive ECB rate cut in the near term, which in turn supports the euro against the dollar.
Ireland AIB Services PMI Jumps to 50.8
The April reading of 49.7 had flagged contraction, raising concerns that the eurozone slowdown was spreading to services. May's reversal suggests the contraction was shallow or temporary. The new orders and employment subcomponents often lead the headline figure, so traders will watch for the full release details to see if those also improved.
Ireland's PMI is a leading indicator for the broader eurozone because the country's open economy amplifies global demand shifts. A sustained reading above 50 would imply that the ECB's current policy stance – steady rates with a cautious tone – is not overly restrictive for the services sector.