The euro rose to a one-month high against the dollar as a report showed manufacturing in the 17-nation currency bloc expanded for the first time in two years in July, bolstering demand for the region’s assets. Europe’s shared currency strengthened against all but one of its 16 major peers after the release of the purchasing managers’ indexes. Australia’s dollar dropped for the first time in four days versus its U.S. counterpart after data showed a contraction of manufacturing in China, the nation’s biggest trading partner. A gauge of volatility among Group-of-Seven currencies slid for a 10th consecutive day. Indonesia’s rupiah slumped to a four-year low. “The PMIs were a little bit stronger than anticipated� in Europe, said Steve Barrow, the head of Group-of-10 research at Standard Bank Plc in London. “If you look at how euro-region data has progressed recently we’ve tended to see more upside surprises. There’s a relative improvement in the perception of euro-zone data, which is helping the euro.� The euro rose 0.1 percent to $1.3237 at 10:36 a.m. London time, after reaching $1.3255, the highest level since June 20. Europe’s shared currency climbed 0.8 percent to 132.49 yen, and reached a two-month high of 132.61 yen. The dollar rose 0.7 percent to 100.10 yen. The euro may reach $1.34 by the end of next week, should positive developments continue, Barrow predicted. Euro’s Gains A manufacturing index based on a survey of purchasing managers in the euro area rose to 50.1 from 48.8 in June, London-based Markit Economics said today. Economists in a Bloomberg survey predicted a reading of 49.1. A level of 50 is the dividing line between expansion and contraction. The euro has appreciated 2.8 percent in the past three months, lagging behind only the Swedish krona among 10 developed-market currencies tracked by Bloomberg Correlation-Weighted Indexes. The yen climbed 0.3 percent and the dollar advanced 0.9 percent. The Aussie dollar is the worst performer, declining 11 percent. Australia’s currency fell against all its major peers today after a preliminary reading of 47.7 for the China Purchasing Managers’ Index released by HSBC Holdings Plc and Markit Economics was lower than the 48.2 median estimate a Bloomberg survey. “Troubling developments in China are a burden upon the Australian dollar,� Neil Mellor, a currency strategist at Bank of New York Mellon in London, wrote in a note to clients. “Central to our bearish inclinations toward the Australian dollar has been China and on this front we feel ever more certain that downside risks prevail.� Won Strength Australia’s currency dropped 0.9 percent to 92.13 U.S. cents. It reached 89.99 U.S. cents on July 12, the lowest level in almost three years and down from its 2013 high of $1.0599 on Jan. 10. The rupiah declined 0.6 percent to 10,260 per dollar, according to prices from local banks. It touched 10,276 earlier, the weakest level since July 2009. South Korea’s won climbed 0.4 percent to a six-week high before a report tomorrow that economists predict will show the nation’s economy grew the most in a year. To contact the reporter on this story: Emma Charlton in London at echarlton1@bloomberg.net To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net

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