The euro strengthened against the other major currencies in the early European session on Tuesday, as data showed that Eurozone manufacturing growth rose to a 19-month high in November and Germany’s unemployment rate decreased to a record low.
Data from Markit showed that Eurozone’s final manufacturing Purchasing Managers’ Index, or PMI rose to 52.8 in November from 52.3 in October. The final PMI of 52.8 was in line with an earlier flash reading.
Separate data from Markit showed that German factory Purchasing Managers’ Index rose to 52.9 in November from 52.1 in the previous month. The reading reached its highest level in three months.
Data from the Federal Labor Agency showed that Germany’s unemployment rate decreased to a record low in November. The jobless rate dipped to 6.3 percent in November from 6.4 percent in October. It was forecast to remain unchanged at 6.4 percent.
The number of people out of work declined by 13,000, bigger than the expected decrease of 5,000.
Traders now await the European Central Bank’s monetary policy meeting on Thursday, with many expecting the bank to provide further stimulus. Meanwhile, traders bet that the U.S. jobs data due this week is likely to support a Fed rate hike from near zero. The Federal Reserve’s Monetary Policy Committee is set to meet on December 15-16.
In the Asian trading today, the euro held steady against its major rivals.
In the early European trading, the euro rose to a 4-day high of 1.0619 against the U.S. dollar, from an early low of 1.0562. On the upside, 1.08 is seen as the next resistance level for the euro.
Against the yen, the euro advanced to a 1-week high of 130.59 from an early 4-day low of 129.76. The euro is likely to find resistance around the 132.50 area.
Data from Nikkei showed that the manufacturing sector in Japan continued to expand in November and at a faster pace, with a PMI score of 52.6. That’s up from 52.4 in October. It also marks the strongest reading for the index since March 2014.
Moving away from an early 1-week low of 0.7007 against the pound, the euro edged up to 0.7026. The next possible upside target for the euro is seen around the 0.71 region.
Against the Swiss franc and the Canadian dollar, the euro climbed to 1.0906 and 1.4145 from early lows of 1.0856 and 1.4098, respectively. If the euro extends its uptrend, it is likely to find resistance around 1.10 against the franc and 1.45 against the loonie.
Meanwhile, the euro dropped to nearly a 6-month low of 1.5895 against the NZ dollar and nearly a 5-month low of 1.4536 against the Australian dollar, from early highs of 1.6051 and 1.4630, respectively. Thereafter, the euro held steady against both the currencies.
Looking ahead, Canada GDP data for September, Canada RBC manufacturing PMI for November, U.S. construction spending data for October and ISM U.S. manufacturing PMI for November are slated for release in the New York session.
At 12:45 pm ET, Federal Reserve Bank of Chicago President Charles Evans is expected to speak about the economic outlook and monetary policy at the Lansing Regional Chamber of Commerce in East Lansing.
The material has been provided by InstaForex Company – www.instaforex.com