Euro Rises As Eurozone Private Sector Growth Improves

05:27, 23rd October 2014

(RTTNews) - The euro erased its early losses and strengthened against the other major currencies in the European session on Thursday, after data showed that the Eurozone private sector logged a marginal upturn in growth in October.

Data from Markit Economics showed that the composite output index rose to 52.2 in October from a 10-month low of 52 in September. The score was forecast to fall to 51.5.

The services Purchasing Managers' Index remained unchanged at 52.4 in October when it was expected to drop to 52.

The manufacturing PMI advanced to 50.7 from 50.3 in September. Economists had forecast the reading to drop to 49.9.

Another data from the same agency showed that Germany's private sector growth improved marginally in October. The composite output index rose to 54.3 in October from 54.1 in September. The private sector extended the current sequence of output growth to a year-and-a-half.

The manufacturing Purchasing Managers' index climbed unexpectedly to 51.8 in October from 49.9 a month ago. Economists had forecast the index to fall to 49.5.

Meanwhile, the euro fell against its major rivals in early deals after the release of a data from Markit Economics showing that the French private sector contracted at the sharpest rate in eight months in October. The composite output index fell to 48 in October from 48.4 in September.

In the Asian trading, euro held steady against most major currencies.

In the European session, the euro rose to a 2-day high of 136.27, from an early 1-week low of 135.20. At yesterday's close, the euro was trading at 135.46 against the yen. If the euro extends its uptrend, it is likely to find resistance around the 137.03 area.

Data from Markit Economics showed that Japan's manufacturing sector expanded at an accelerated pace in October, with a PMI score of 52.8. That follows the reading of 51.7 in September.

Moving away from an early more than a 3-week low of 1.2053 against the Swiss franc and nearly a 2-week low of 1.2613 against the U.S. dollar, the euro edged up to 1.2064 and 1.2666, respectively. On the downside, 1.207 against the franc and 1.28 against the greenback are seen as the next support level for the euro.

Against the pound, the euro edged up to 0.7914 from an early 10-day low of 0.7870. The euro may test resistance around the 0.79 area.

Looking ahead, U.S. weekly jobless claims for the week ended October 11, house price index for August, manufacturing PMI for October and leading indicator for September are due to be released in the New York session. The Eurozone consumer sentiment index for October is also expected later in the day.

At 10:30 am ET, Bank of Canada Governor Stephen Poloz will testify, along with Senior Deputy Governor Carolyn Wilkins, before the Senate Standing Committee on Banking, Trade, and Commerce, in Ottawa, Canada.