Euro Advances On China Stimulus Optimism

(RTTNews) - The euro moved up against its major counterparts in the European session on Monday, as risk sentiment improved after China announced new measures to step up support for the economy.

The plan, which targets the automobile, real estate, and services sectors, is aiming to "give full play to the fundamental role of consumption in economic development."

Flash estimate from Eurostat showed that Eurozone returned to growth in the second quarter amid falling inflation.

GDP in the euro area grew 0.3 percent in the second quarter of 2023 compared to the previous quarter.

Separate figures from the statistical office revealed that Eurozone inflation fell in line with expectations to 5.3 percent year-on-year in July, compared with 5.5 percent in June.

The euro climbed to 1.1039 against the greenback and 0.8588 against the pound, from its early lows of 1.1005 and 0.8561, respectively. The currency may challenge resistance around 1.13 against the greenback and 0.88 against the pound.

The euro advanced to a 6-day high of 0.9608 against the franc and a 1-week high of 157.24 against the yen, off its early lows of 0.9578 and 155.11, respectively. The currency is seen facing resistance around 1.00 against the franc and 159.00 against the yen.

The euro recovered to 1.4603 against the loonie, reversing from an early low of 1.4567. Next near term resistance for the currency is likely seen around the 1.48 level.

The euro was down against the kiwi and the aussie, at 1.7746 and 1.6435, respectively. The currency may locate support around 1.76 against the kiwi and 1.63 against the aussie.

Looking ahead, U.S Chicago PMI for July is slated for release in the New York session.