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Euro Rises After Eurozone PMI Reports

The euro strengthened against other major currencies in the European session on Wednesday, after data showed that Eurozone private sector activity maintained strong growth momentum in August.

Data from IHS Markit showed Eurozone flash manufacturing PMI climbed to 57.4 in August from 56.6 in July. In contrast, it was forecast to decline to 56.3.

The flash composite output index rose slightly to 55.8 in August from 55.7 in July. Meanwhile, economists had expected the index to fall to 55.4.

At the same time, the services Purchasing Managers' Index dropped to a 7-month low of 54.9 in August from 55.4 in July. The index was expected to remain stable at 55.4.

The German flash services Purchasing Managers' Index rose to 53.4 from 53.1 in July. That was in line with economists' forecast. The composite output index climbed to a 2-month high of 55.7 in August from 54.7 in July.

Similarly, the factory PMI increased to 59.4 in August from 58.1 in July. In contrast, the index was expected to fall to 57.6.

The French services Purchasing Managers' Index fell to a 7-month low to 55.5 in August from 56.0 in July. The expected reading for the month was 55.8. The manufacturing PMI climbed to a 76-month high of 55.8 in August from 54.9 in the prior month. Meanwhile, it was forecast to drop to 54.5.

In the Asian trading today, the euro held steady against its major rivals.

In the European trading, the euro rose to a 10-month high of 0.9214 against the pound and a 1-week high of 1.1419 against the Swiss franc, from early lows of 0.9160 and 1.1376, respectively. If the euro extends its uptrend, it is likely to find resistance around 0.93 against the pound and 1.15 against the franc.

The euro advanced to 1.1794 against the U.S. dollar, from an early 2-day low of 1.1739. The euro may test resistance near the 1.19 region.

Against the Australian and the New Zealand dollars, the euro climbed to a 1-week high of 1.4948 and a 14-month high of 1.6353 from early lows of 1.4856 and 1.6149, respectively. On the upside, 1.50 against the aussie and 1.65 against the kiwi are seen as the next resistance levels for the euro.

Against the yen and the Canadian dollar, the euro edged up to 129.06 and 1.4829 from early lows of 128.49 and 1.4772, respectively. The euro is likely to find resistance around 131.00 against the yen and 1.50 against the loonie.

Looking ahead, U.S. Markit's PMI reports for August, U.S. new home sales data for July, Eurozone consumer confidence index for August and U.S. weekly crude oil inventories data are slated for release in the New York session.

At 9:05 am ET, Federal Reserve Bank of Dallas President Robert Kaplan is expected to speak at the Permian Basin Petroleum Association, in Midland, Texas.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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