The euro gained against the greenback on Wednesday as hopes of a trade deal between the US and China bolstered risk appetite globally, while the Australian dollar outperformed on strong local and Chinese economic data. The Financial Times reported that the US and China are closer to reaching a final trade agreement.
"Reports late yesterday that the US and China are close to finalizing their trade deal buoyed sentiment across the board and the euro got a bit of a lift from that as well," said Richard Franulovich, head of FX strategy at Westpac Banking Corp in New York. Better than expected service sector data in Europe further helped the single currency as German 10-year Bund yields also headed back above zero. The services Purchasing Managers' Index (PMI) rose to 53.3 from 52.8, ahead of the flash estimate of 52.7.
"The PMIs today were not robust but certainly better than expected," Franulovich said. The euro was last up 0.28% against the US dollar at $1.1233. The single currency on Tuesday fell to its lowest levels in more than three weeks and neared $1.1174, which if broken would send the currency to its weakest levels since June 2017.
The Australian dollar jumped 0.65% against the greenback after Chinese and local data gave the currency a boost. Sterling, gained 0.25% against the US dollar after Prime Minister Theresa May announced talks with the opposition Labour party in a bid to break the Brexit deadlock that may lead to a softer departure deal with the EU.
The greenback was little changed by data on Wednesday that showed that US private employers added 129,000 jobs in March, below economists' expectations and the lowest since September 2017.
Comments
Comments are closed.