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Forex News: Euro Advances As Eurozone PMI Hits 15-year High

Euro Advances As Eurozone PMI Hits 15-year High

06/23/2021 - 06:55:00 (RTTNews)

(RTTNews) - The euro rose against its most major counterparts in the European session on Wednesday, following the release of a data showing strong private sector expansion in the euro area for June.

Flash survey data from IHS Markit showed that the euro area private sector grew at the fastest rate in 15 years in June as the economy re-opened further from virus-fighting restrictions and vaccine progress boosted confidence.

At 59.2, the flash composite output index hit a 180-month high, up from 57.1 in May. The reading was also above economists' forecast of 58.8.

The services Purchasing Managers' Index advanced to 58.0 in June from 55.2 in the previous month.

The manufacturing PMI held steady at 63.1 in June, while it was forecast to fall to 62.1.

European stocks are trading mixed despite assurance from Federal Reserve Chair Jerome Powell that the central bank will not accelerate pace of tightening based on inflationary concerns alone.

The euro edged up to 1.1946 against the greenback, from a low of 1.1911 hit at 3:15 am ET. The euro is seen facing resistance around the 1.22 level.

Extending its early rally, the euro touched a 6-day high of 132.61 against the yen. If the euro rises further, it may locate resistance around the 134 level.

The euro recovered from its Asian session's low of 1.0946 against the franc, with the pair trading at 1.0966. The euro may test resistance around the 1.11 region.

In contrast, the euro weakened to a 5-day low of 1.5763 against the aussie, 6-day low of 1.6942 against the kiwi and more than a 5-week low of 1.4665 versus the loonie, off its prior highs of 1.5819, 1.7045 and 1.4703, respectively. The next likely support for the European currency is seen around 1.54 against the aussie, 1.66 against the kiwi and 1.44 versus the loonie.

The euro dropped to a 2-1/2-month low of 0.8530 against the pound, although it has since stabilized around 0.8558.

Survey data from IHS Markit and the Chartered Institute of Procurement & Supply showed that the UK private sector logged one of the fastest expansion on record in June as there were marked increases in output across the manufacturing and services sectors as the economy continued to reopen, following the COVID-19 lockdown.

The flash composite output index dropped to 61.7 in June from 62.9 in May. The score was forecast to fall slightly to 62.8.

Looking ahead, PMI reports from major European economies are due in the European session.

Canada retail sales for April and U.S. new home sales for May will be featured in the New York session.

For comments and feedback: contact editorial@rttnews.com

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