The euro hit a two-week high against the dollar and a one-month high versus sterling on Friday as strong readings of eurozone purchasing managers' surveys added to the view the region's economy is improving. A rise in oil prices to their highest level of the year also helped to boost risk appetite and helped high-yielding currencies including the Australian and New Zealand dollars to recover from early losses.
An initial reading of the eurozone composite PMI jumped by three points to 50.0 in August, the precise point that divides contraction and growth, and came in far higher than most economists' forecasts. "Much of the thesis of those looking for a stronger dollar has been that the US recovery would outperform the eurozone recovery," said Ray Farris, currency strategist at Credit Suisse in London.
"But the data so far has not been giving the impression that the US is generating a positive growth differential with the rest of the world." By 1140 GMT, the euro traded 0.6 percent higher at $1.4335, after touching $1.4343 for the first time since August 7 in earlier trade. It was 0.2 percent higher at 134.44 yen, having recovered from the day's low of 132.92 yen.
The single currency also rallied to 86.78 pence, its strongest against sterling since late July. US crude oil prices rose more than 1.5 percent to around $74 per barrel, its highest of 2009. This pushed the Australian and New Zealand dollars both up around half a percent against the dollar, while recouping early losses versus the yen.
The euro's gains against the dollar pushed the US currency lower across the board. It fell 0.4 percent against the yen to 93.84 yen, having hit a one-month low of around 93.47 on electronic trading platform EBS. "Some of the positive data recently has not been evoking big reactions and there are still a lot of risks around the corner," said Neil Mellor, currency strategist at Bank of New York Mellon.
Comments
Comments are closed.