The Euro gained against the U.S. Dollar following stellar reports on the region’s manufacturing and services sectors, denoting that the economy has improved steadily, reducing the possibility that the European Central Bank could expand stimulus.
Euro Surges On Economics
The Euro rate advanced by the most in two weeks against the greenback and strengthened versus the majority of its Forex counterparts after reports showed that the region’s economy is not as fragile as many analysts have indicated. According to industry news, the survey of purchasing managers in the area of manufacturing climbed from 53.0 to 53.3, and services rose from 52.2 to 53.1, reaching the highest level in three years while denoting growth. In Germany, the announcements revealed that the manufacturing PMI went from a reading of 53.7 in March to 54.2 this month, while the services PMI jumped from 53.0 to 55.0. The only disappointing figures came from France where manufacturing activities declined from 52.1 to 50.9, and services posted at 50.3 compared to one month prior when the PMI came in at 51.5. The Euro was also bolstered by the fact that investors sought high-yield assets from countries such as Greece, Italy, Portugal and Spain, suggesting that the markets are becoming more optimistic about the E.U.
South Pacific Currencies Dip On Chinese Reports
The New Zealand Dollar weakened against its U.S. peer following the release of less than stellar economic releases out of China, and as the money market awaits the Reserve Bank of New Zealand’s policy statement. According to releases, the gauge which measures Chinese manufacturing activities was at 48.3 in April, following a reading of 48 in March. Although it showed a slight increase, it disappointed by remaining below 50, denoting that it has not reached expansion territory. The government is worried that the numbers point to continued economic weakness. The announcement also had an impact on the Australian Dollar, since China is this South Pacific country’s major trade partner. But that’s not the only factor weighing on the Aussie. Domestic news confirmed that the index which measures consumer prices posted at 2.6 percent for the initial quarter of the year, despite that the Reserve Bank predicted the level of inflation would remain unchanged.
Yen Trades Higher Versus Greenback
The Yen remained stronger against the U.S. Dollar even as speculators in the Forex digested dovish comments by Taro Aso, the Finance Minister of Japan, who questioned the success of Abenomics. In his statement, he indicated that the weaker Yen has not contributed to a major surge in exports.