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Euro Higher Despite Weak Eurozone PMI

The euro was higher against its major counterparts in the European session on Tuesday, despite the release of a data showing a slowdown in Eurozone business activity to more than a two-year low in October.

Survey data from IHS Markit showed that Eurozone's private sector expanded at the weakest pace in over two years in October as both manufacturing and services recorded slower rates of growth.

The composite Purchasing Managers' Index, or PMI, fell to 53.1 from September's 54.1. The reading was the lowest since September 2016. The flash reading for the composite PMI was 52.7.

Separate data showed that Germany's services sector expanded more-than-expected at in October, albeit at a slowest pace in three months.

The services Purchasing Managers Index, or PMI, fell to 54.7 in October from September's eight-month high of 55.9. The latest reading was the lowest since July, but was above the flash estimate of 53.6.

Meanwhile, European shares fell as investors largely refrain from making significant moves ahead of some key political and economic events, like the midterm elections in the U.S., and the Federal Reserve's monetary policy review.

The euro strengthened to a 4-day high of 1.1426 against the greenback, from a low of 1.1399 hit at 11:15 pm ET. If the euro rises further, it may challenge resistance around the 1.16 level.

The single currency moved up to more than a 2-week high of 129.46 against the yen, after falling to 129.09 at 5:00 pm ET. The euro is likely to find resistance around the 131.00 level.

Data from the Ministry of Internal Affairs and Communications showed that Japan household spending fell 1.6 percent on year in September, coming in at 271,273 yen.

That was well shy of expectations for an increase of 1.5 percent and down sharply from the 2.8 percent gain in August.

Having dropped to near a 4-week low of 0.8725 against the pound at 3:15 am ET, the euro reversed direction and bounced off to 0.8741. The euro is seen finding resistance around the 0.89 region.

The common currency firmed to 1.1470 against the Swiss franc, its strongest since October 22. On the upside, 1.16 is possibly seen as the next resistance level for the euro.

The euro held steady against the loonie, after rising to a 4-day high of 1.4982 at 3:00 am ET. At yesterday's close, the pair was worth 1.4953.

Looking ahead, at 8:30 am ET, Canada building permits for September will be out.

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