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Euro Strengthens On Strong German Factory Orders, Eurozone PMI Data

The euro firmed against its major counterparts in the early European session on Wednesday, as the euro area private sector expanded slightly more than initially estimated in October and German factory orders beat forecasts in September.

Final data from IHS Markit showed that Eurozone final composite output index rose to 50.6 in October from 50.1 in September. The score was above the flash estimate of 50.2.

The services Purchasing Managers' Index improved to 52.2 in October from 51.6 a month ago and exceeded the flash 51.8.

German services PMI rose to 51.6 from 51.4 in September. The flash reading was 51.2.

However, the latest pace of growth was the weakest since the current upturn began in 2013.

Data from Destatis showed that Germany's factory orders grew more than expected in September on rising domestic and foreign demand.

Factory orders grew 1.3 percent month-on-month, reversing a 0.4 percent fall in August. Orders were forecast to climb 0.5 percent.

European stocks were subdued as investors awaited more clarity on U.S-China trade talks.

Underlying sentiment turned cautious after reports suggested that Beijing wants Washington to lift punitive tariffs as part of a truce in a trade war.

The euro held steady against its major counterparts in the previous session, excepting the yen.

The euro rose to 1.1092 against the greenback, from a low of 1.1067 hit at 7:00 pm ET. The euro is seen facing resistance around the 1.12 mark.

Reversing from a 5-day low of 120.64 seen at 2:00 am ET, the euro bounced off to 120.91 against the Japanese yen. Next near term resistance for the euro is likely seen around the 123.00 level.

Survey from IHS Markit showed that Japan's private sector contracted for the first time in more than three years in October.

The Jibun Bank final composite output index fell to 49.1 in October from 51.5 in September. The initial score for September was 49.8.

The euro appreciated to 1.1013 against the franc, from yesterday's closing value of 1.0993. The currency may locate resistance around the 1.13 region, if it rises again.

The euro that finished yesterday's trading session at 1.4569 against the loonie ticked up to 1.4597. Further rally is likely to take the euro to a resistance around the 1.47 region.

The single currency gained to 0.8610 against the pound, after reaching as low as 0.8591 at 5:00 pm ET. The next possible resistance for the euro is seen around the 0.88 mark.

Survey from the Confederation of British Industry showed that British small and medium-sized manufacturers optimism dropped at the fastest pace since mid-2016.

The business sentiment fell to -32 in three months to October, the fastest fall since July 2016.

In contrast, the euro pulled back to 1.6053 against the aussie, from a high of 1.6087 it touched at 2:00 am ET. If the euro falls further, 1.57 is seen as its next support level.

After rising to a 6-day high of 1.7413 at 2:10 am ET, the euro eased off to 1.7365 against the kiwi. The euro may possibly face support around the 1.69 level.

Looking ahead, at 10:00 am ET, Canada Ivey PMI for October will be released.

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