Euro Advances As Eurozone Private Sector Rebounds

(RTTNews) - The euro climbed against its major rivals in early European deals on Thursday, as business activities across the euro area showed improvement in July, indicating signs of pick up in economic growth.

The Eurozone private sector growth rebounded in July from a six-month low, flash survey data from Markit Economics showed.

The flash composite output index rose to 54 in July from 52.8 in June. The manufacturing PMI rose marginally to 51.9 from 51.8 in June, while it was expected to fall to 51.7.

The services Purchasing Managers' Index climbed unexpectedly to a 38-month high of 54.4, from 52.8 in June.

Separate data from Markit Economics showed that Germany's private sector expanded at a stronger pace in July as services activity growth hit a 37-month high.

The flash composite output index rose to 55.9 in July, a 3-month high, from 54 in June. The services Purchasing Managers' Index rose to 56.6 in July, a 37-month high, from 54.6 in June.

The manufacturing PMI climbed unexpectedly to 52.9 from 52 a month ago.

The private sector activity in France contracted at a slower in July, as activity in the service sector rebounded, another data showed.

The flash composite purchasing managers' index rose to 49.4 in July from 48.1 in June. This marked the highest score in three months.

Service sector activity rose to a three month high in July, with the corresponding index at 50.4 compared with 48.2 in June, moving into expansion territory.

The euro recovered to 1.2150 against the franc, from an early 2-day low of 1.2143. The next possible resistance for the euro is seen around the 1.22 level.

The euro climbed to a 2-day high of 1.3474 against the greenback, after having fallen to more than an 8-month low of 1.3437 at 2:00 am ET. On the upside, the euro may find resistance around the mark. The euro-greenback pair finished deals at 1.3461 yesterday.

After falling to 0.7887 against the pound at 2:50 am ET, the euro advanced to a 3-day high of 0.7924 during early European deals. The euro is likely to challenge resistance at the 0.80 zone. At Wednesday's close, the pair was valued at 0.7898.

U.K. retail sales increased marginally in June as food sales recovered from the prior month, data from the Office for National Statistics showed.

Retail sales including auto fuel rose 0.1 percent in June from May, when it dropped 0.5 percent. Sales were expected to grow by 0.3 percent.

The euro advanced to a 2-day high of 136.91 against the yen, coming off from an early 5-1/2-month low of 136.36. Continuation of uptrend may take the euro to a resistance around the 137.6 region. The euro-yen pair ended yesterday's deals at 136.59.

Japan posted a merchandise trade deficit of822.2 billion yen in June, data from the Ministry of Finance showed.

That missed forecasts for a shortfall of 642.9 billion yen following the 910.8 billion yen deficit in May.

Extending early advance, the euro spiked up to a 6-week high of 1.5711 against the kiwi, reversing from an low of 1.5459 hit at the beginning of Asian session. If the euro extends gain, 1.58 is seen as its next possible resistance level.

The euro strengthened to 1.4459 against the loonie and 1.4267 against the aussie, after declining to 1.4430 and an 8-1/2-month low of 1.4209, respectively in previous deals. Next key upside target levels for the euro may be eyed around 1.455 against the loonie and 1.44 against the aussie.

Looking ahead, the U.S. weekly jobless claims for the week ended July 19, new home sales for June and Markit's flash manufacturing PMI for July are to be released in the New York session.

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