RTTN:Euro Mixed After Euro-zone PMI Hits 2-year High
The euro resumed its Asian session's rally against the yen and the Swiss franc on Thursday in early deals, after a brief pause in early London session following the French PMI miss, as euro-zone's forecast-beating private sector growth marked a 2-year high in August. The euro, however, pared some of its advance against the currencies of the U.S. and the U.K.
Preliminary results of a survey by Markit Economics revealed that the headline composite output index, a gauge of business activity in both manufacturing and services, rose to a 26-month high of 51.7 in August from 50.5 in July. Economists had forecast the score to rise to 50.9.
The manufacturing purchasing managers' index rose to 51.3 in August from 50.3 in July. This was the highest reading in 26 months and was above the expected score of 50.7.
The services PMI climbed to a 24-month high of 51 from 49.8 in July. The consensus score was 50.2.
Elsewhere, Switzerland's trade surplus declined more than expected in July, the latest figures released by the Federal Customs Administration showed today. The surplus fell to CHF 2.38 billion in July from CHF 2.8 billion in June. Economists had forecast the surplus to decline to CHF 2.6 billion.
The asset purchase programme remains an available tool that the policy board might adopt if it feels that the economy needs further support, Bank of England Monetary Policy Committee member Martin Weale told the Daily Telegraph in an interview.
Weale said he could "certainly envisage circumstances in which it would be sensible to undertake further asset purchases." The circumstances include further shocks from the euro area, or turbulence in emerging economies.
In the U.S., the minutes of the Federal Reserve's July 30-31 meeting signaled broad support to start paring stimulus later this year and eventually wind down the $85 billion-a-month bond-buying program around the middle of 2014.
The Fed minutes, however, described recent economic data as "mixed" emphasizing the importance of evaluating addition information on the economy before deciding on any changes to the pace of asset purchases.
Activity in China's vast manufacturing sector bounced back from contraction territory in August, as new orders recovered, preliminary results of a survey by Markit Economics and HSBC revealed. The flash HSBC purchasing managers' index rose to 50.1 in August from a 11-month low of 47.7 in July. Economists had expected the index to increase to 48.2.
The euro advanced to 131.65 against the yen around 5:05 am ET, its highest level since August 02 and the pair remained in positive terrain in subsequent trading hours. The pair is poised to extend gains towards the 132.0 resistance area, a trend-line resistance of a broader-consolidation in the daily time frame starting from late June.
The common currency climbed to a 3-day high of 1.2349 against the Swiss franc by 05:50 am ET. The pair may probably extend its rally as the failed test of 1.2280 support on Tuesday and a subsequent bounce could help the pair challenging the 1.24 resistance.
On the contrary, the euro fell to a weekly low of 1.3306 against the US dollar and erased its early European session's advance against the pound to trade lower at 1.3306 around 6:10 am ET. The next likely support for the euro-greenback pair is seen around the 1.3260 level, while the euro-pound currency cross may find target around the 0.8535 area.
Looking ahead, the U.S. weekly jobless claims for the week-ended August 10, house price index for June and leading indicators for July are expected to garner market attention in the North American session.
