The Euro managed to edge higher against the US Dollar on Thursday after it found support from data which showed that the recovery in the Eurozone’s private sector continued this month.
Investors widely ignored a separate report which showed that manufacturing activity expanded by its slowest-level in six months in May.
Instead they focused on the more positive service data which showed that the sector expanded at its fastest pace in three-years.
According to Markit the Eurozone’s private sector is seeing respectable growth. It Composite PMI index came in at 53.9, a slight decline on the previous months figure of 54 but was still above the 50 mark which divides contraction from expansion.
The regions service sector saw activity climb to a 35-month high and output across the sector increased for an eleventh consecutive month.
New order growth jumped to its highest level in three-years and employment increased at its fastest pace since September 2011.
The Euro to US Dollar exchange rate is trading around 1.3678
“We have to be a bit careful in drawing too-strong conclusions from this survey about the pace of the Eurozone recovery,” said Martin van Vliet, senior economist at ING Groep NV in Amsterdam. “With inflation low and a sustained Eurozone recovery not yet assured, further ECB easing in June looks all but certain.”
A separate report showed that manufacturing activity in the Eurozone expanded at its lowest pace in six months with Markit’s manufacturing PMI sliding from Aprils reading of 53.4 to 52.5. The number was below economist forecasts for a reading of 53.2.
As usual Germany led the way in terms of growth but once again France is causing concerns as it continues to lag behind in terms of activity. Both manufacturing and service industries in France declined in May.
“Of greatest concern is France, living up to its moniker of ‘sick man of Europe’ by sliding back into contraction as Germany continues to enjoy robust growth and the rest of the region experiences its best expansion since mid-2007,” said Markit’s chief Economist Chris Williamson.
The US Dollar could find support later in the session if today’s US jobless claims and manufacturing PMI data comes in positively.
Euro Exchange Rate News:
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,US Dollar,1.3678 ,
Euro,,British Pound,0.8109 ,
Euro,,Australian Dollar,1.4776 ,
Euro,,Canadian Dollar,1.4921 ,