Euro Climbs On Strong German, Eurozone PMIs
24 Oktober 2016 - 07:45AM
RTTF2
The euro advanced against its major opponents in early European
deals on Monday, as data showed that business activities in Germany
and Eurozone expanded faster than expected in October, pointing to
a strong growth across the region.
Flash survey from IHS Markit showed Eurozone private sector
expanded at the fastest pace in ten months in October
The composite output index climbed to 53.7 in October from 52.6
in September. It was forecast to increase slightly to 52.8. Any
score above 50 indicates expansion in the sector.
The flash services Purchasing Managers' Index increased to a
9-month high of 53.5 in October from 52.2 in the preceding month.
That was above the reading of 52.4 expected by economists.
The manufacturing PMI also rose to a 30-month high of 53.3 in
October from 52.6 a month earlier. At same time, it was expected to
remain stable at 52.6.
German private sector growth recovered sharply to a three-month
high in October, with the flash Germany Composite Output Index
rising to 55.1 from a 16-month low of 52.8 in September.
The flash Services Purchasing Managers' Index also climbed to a
three-month high of 54.1 from 50.9 in September. Economists had
forecast a score of 51.8.
The flash Manufacturing PMI rose to a thirty-three month high of
55.1 from 54.3 in September. Economists had expected the reading to
hold steady.
European stocks advanced after the PMI data that showed that the
region is on track for a strong rebound in the quarter.
The currency showed mixed performance in the Asian session.
While the euro held steady against the yen and the pound, it
declined against the greenback and the Swiss franc.
The euro reversed from an early low of 1.0859 against the
greenback, with the pair rebounding to 1.0894. Continuation of the
euro's uptrend may see it challenging resistance around the 1.2
mark.
The single currency, having fallen to a 2-1/2-month low of
1.0805 against the Swiss franc at 10:45 pm ET, reversed direction
and climbed to 1.0828. The euro is seen finding resistance around
the 1.12 region.
The 19-nation currency edged up to 113.20 against the Japanese
yen, off its early low of 112.84. Further uptrend may lead the
euro-yen pair to a resistance near the 115.00 area.
Survey figures from IHS Markit showed Japan's manufacturing
activity expanded at the fastest pace in nine months in
October.
The Nikkei Flash Manufacturing Purchasing Managers' Index, or
PMI, rose to 51.7 in October from 50.4 in September.
The euro advanced to a 4-day high of 1.4536 against the loonie,
following a decline to 1.4492 at 3:15 am ET. The next possible
resistance for the euro-loonie pair is seen around the 1.465
area.
The euro reclaimed some of its lost ground against the kiwi,
trading at 1.5192, off its previous 4-day low of 1.5162. The single
currency is likely to target resistance around the 1.53 mark.
On the flip side, the euro pulled away from an early high of
0.8914 against the pound and was trading lower at 0.8895. On the
downside, 0.86 is possibly seen as the next support for the
euro.
The euro trended lower against the aussie also, with the pair
trading at 1.4245. At last week's close, the pair was valued at
1.4309. On the downside, the euro may target support around the
1.40 mark.
Looking ahead, Canada wholesale sales for August are set for
release at 8:30 am ET.
At 9:00 am ET, the Federal Reserve Bank of New York President
William Dudley will deliver opening remarks at the Federal Bank of
New York Annual Conference.
Subsequently, Federal Reserve Bank of St. Louis President James
Bullard speaks about the economy and monetary policy at the
Association for University Business and Economic Research in
Arkansas.
Markit's U.S. flash manufacturing PMI for October will be out at
9:45 am ET.
The Swiss National Bank Chairman Thomas Jordan speaks about
monetary policy with negative interest rates at the University of
Basel at 12:15 pm ET.
The Bank of Canada Governor Stephen Poloz, will testify along
with Senior Deputy Governor Carolyn Wilkins before the House of
Commons Standing Committee on Finance in Ottawa at 3:30 pm ET.
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