Euro popped higher in Europe on Wednesday, boosted by better-than-expected PMI surveys, where service sector activity reached a 34-month high and factory sector activity rose to a 3-month high, bringing some relief as recent news-flow has increasingly underperformed relative to expectations.
The euro-area's activity sectors has started the second quarter on its strongest footing in nearly three years.The Markit Eurozone Purchasing Managers' Index (PMI) composite Output Index rose from 53.1 in March to 54.0 in April, , while analysts` called for a slight change around 53.0.
Germany's both manufacturing and services sectors advances more than expected in April, recovering from a slight slowdown in growth in March. Manufacturing PMI rose to 54.2 from 53.7 in March, while services PMI increased to 55.0 from 53.0, better than the 53.4 forecast by analysts.
The data, however, provided proof that French growth was still "fragile" where the country's manufacturing PMI falling to 50.9 from 52.1 in March, and weaker than the 51.9 expected by analysts. The French services PMI dropped to 50.3 from 51.5 in March.
Euro added 0.27 percent against the U.S. dollar so far in the day, while according to the four-hour time frame the pair was last seen trading at $1.38452 after opening at $1.38482. The EURUSD pair so far hit a session high at $1.38496.
The pair was likely to find support at 1.3784, Tuesday's low and resistance at 1.3863. Technically, Stability above the referred resistance level is positive to strengthen the bullish possibility.
Pound mixed, stays near 4-1/2 year highs
Pound edged lower in Europe after the minutes of the Bank of England's (BoE) April meeting showed members were uncertain over economic slack and also held differing views on the outlook for inflation over the medium term.
Meanwhile, a separate report showed that the UK government has hit its target for deficit reduction for 2013-2014 financial years.
Public sector net borrowing came in at 107.7 billion pounds, or 6.6% of Gross Domestic Product - The smallest deficit in five years and in line with the 107.8 billion pounds projected by the Office for Budget Responsibility last month.
Pound is currently trading at $1.68009 0.11 percent lower compared with a session opening at $1.68175. Cable was likely to find support at 1.67853, Tuesday's low and resistance at 1.68412.
Yen gains vs. dollar, focus on Ukraine
The Japanese yen firmed in Europe, adding 0.13 percent against the greenback on safe haven demand as tensions over Ukraine limited yen's losses.
The USDJPY pair is currently trading at ¥102.216 after opening at ¥102.475; the pair so far hit a session low at ¥102.498. The Japanese yen was up against the Euro and the British pound, with EURJPY up 0.01% at ¥141.508, and GBPJPY up 0.40 percent at ¥171.669.
Ukraine acting President Oleksander Turchinov said the government was forced to re-launch a ‘full-scale' after a shootout at a militia checkpoint in eastern Ukraine while a local politician from ruling party was found dead with signs of torture, shattering Easter truce declared by Kiev`s interim government.
Failure of the Geneva truce could only bring more bloodshed in eastern Ukraine, but may also prompt the United States to impose tougher sanctions on the Kremlin.
