Euro Advances On Robust German PMI Data

(RTTNews) - The euro strengthened against most major currencies in the European session on Tuesday, after data showed that Germany's private sector expanded for the first time in ten months in April driven by a solid rise in services activity.

Data from S&P Global showed that the flash composite output index rose more-than-expected to 50.5 in April from 47.7 in the previous month. The reading was seen at 48.6.

The services Purchasing Managers' Index posted a ten-month high reading of 53.3 in April, up from 50.1 in the previous month. Economists had forecast the index to climb to 50.6.

At 42.2, the manufacturing PMI rose moderately from 41.9 in March but remained below forecast of 42.8.

European stocks traded higher after a survey showed that business activity in the euro zone expanded at its fastest pace in nearly a year this month.

The composite PMI increased from 50.3 to 51.4 in April on the back of a buoyant recovery in the bloc's dominant service sector.

Expectations of interest rate cuts by the European Central Bank and the Bank of England also helped underpin investor sentiment.

The European currency held steady against its major rivals in the Asian trading today.

In the European trading now, the euro rose to a 16-year high of 165.61 against the yen, from an early low of 164.63. The euro is likely to find resistance around the 167.00 region.

Against the U.S. dollar and the Swiss franc, the euro advanced to nearly a 2-week high of 1.0696 and an 8-day high of 0.9741 from early lows of 1.0638 and 0.9710, respectively. If the euro extends its uptrend, it is likely to find resistance around 1.09 against the greenback and 0.98 against the franc.

Meanwhile, the euro retreated against the pound after the release of U.K. PMI data.

In the U.K., a survey showed private sector activity in the country expanded for the sixth consecutive month in April. The composite PMI rose from 52.8 to 54.0, hitting an 11-month high.

The euro fell to 0.8662 against the pound, from an early high of 0.8645. The euro is likely to find support around against the 0.84 region.

Looking ahead, U.S. building permits for March, U.S. Redbook report, U.S. flash PMI data for April, U.S. new home sales data for March and U.S. Richmond Fed manufacturing index for April are slated for release in the New York session.