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Euro Advances After Eurozone Factory PMI Data

The euro strengthened against other major currencies in the European session on Friday, as strong Eurozone manufacturing data spurred optimism about the economic recovery and an influential policymaker said he sees little room for an early interest rate hike by the European Central Bank as long as inflation remains low.

Data from IHS Markit showed showed that the eurozone manufacturing Purchasing Managers' Index rose to 57.4 in August, in line with flash estimate, from 56.6 in July and equaling June's 74-month high.

The PMI remained above the 50.0 no-change mark for 50 successive months.

The headline IHS Markit/BME Germany factory PMI rose to 59.3 in August from July's five-month low of 58.1. This was the third-highest level since April 2011. The flash score for August was 59.4.

France's manufacturing PMI climbed to 55.8 in August from 54.9 a month ago. This was the highest since April 2011. The flash reading was 55.8.

The focus remained on the all-important U.S. jobs report due tonight, with economists expecting the report to show an increase of about 180,000 jobs in August.

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

In the European trading now, the euro rose to a 14-month high of 1.6657 against the NZ dollar and a 2-day high of 1.1929 against the U.S. dollar, from early lows of 1.6560 and 1.1879, respectively. If the euro extends its uptrend, it is likely to find resistance around 1.68 against the kiwi and 1.21 against the greenback.

Against the pound and the yen, the euro advanced to 0.9222 and 131.27 from early lows of 0.9196 and 130.86, respectively. The euro is likely to find resistance around 0.94 against the pound and 132.00 against the yen.

The euro climbed to 1.1442 against the Swiss franc, from an early 2-day low of 1.1407. On the upside, 1.15 is seen as the next resistance level for the euro.

Against the Australian and the Canadian dollars, the euro edged up to 1.5043 and 1.4892 from an early 1-week lows of 1.4962 and 1.4806, respectively. The euro may test resistance around 1.52 against the aussie and 1.51 against the loonie.

Looking ahead, Canada and U.S. manufacturing PMI data for August, U.S. jobs data for August, construction spending data for July, U.S. University of Michigan's final consumer sentiment index for August and U.S. Baker Hughes rig count data are slated for release in the New York session.

by RTTNews Staff Writer

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