Euro Rises On Better Than Expected Eurozone Manufacturing PMI, Stimulus Hopes
The euro advanced against its major counterparts in the European
session on Friday, as Eurozone manufacturing PMI rose more than
forecast in October and optimistic comments from House Speaker
Nancy Pelosi revived the prospect of another stimulus package.
Flash survey data from IHS Markit showed that Eurozone
manufacturing output growth accelerated in October at the fastest
pace since February 2018.
The manufacturing Purchasing Managers' Index rose to a 26-month
high of 54.4 from 53.7 a month ago. The score was expected to fall
Pelosi said that negotiators were making progress in aid talks
and a deal could be reached "pretty soon".
But White House economic adviser Larry Kudlow warned that
"significant policy differences" remained to craft an acceptable
compromise before the election.
The final face-off between US President Donald Trump and his
Democratic rival Joe Biden appeared civilized and informative than
the first chaotic clash.
The candidates argued about handling Covid-19 and reopening the
country, the economy, health-care reform and immigration in the
debate held at Belmont University in Nashville, Tennessee.
The euro bounced off to 1.0720 against the franc, from a 1-week
low of 1.0702 hit at 9:45 pm ET. The euro is seen finding
resistance around the 1.10 mark.
After falling to a 3-day low of 1.1787 at 8:30 pm ET, the euro
appreciated to 1.1854 against the greenback. The euro may possibly
challenge resistance around the 1.20 level.
The euro was trading at 123.75 against the yen, up from a 4-day
low of 123.41 set at 8:45 pm ET. The euro is likely to test
resistance around the 127.5 level, if it continues its rally.
The latest survey from Jibun Bank showed that the manufacturing
sector in Japan continued to contract in October, albeit at a
slower pace, with a manufacturing PMI score of 48.0.
That's up 47.7 in September, although it remain beneath the
boom-or-bust line of 50 that separates expansion from
The euro was higher against the pound, at a 2-day high of
0.9057. The next possible resistance for the euro is seen around
the 0.92 level.
Preliminary data from the Office for National Statistics showed
that UK retail sales grew for a fifth consecutive month in
September and exceeded expectations by a wide margin supported by
food and online sales as well as a recovery in non-food sales.
The volume of retail sales grew 1.5 percent month-on-month in
September, which was much bigger than the 0.4 percent increase
economists had forecast.
The euro staged a modest recovery against the loonie with the
pair trading at 1.5543. This followed a 4-day low of 1.5501 logged
in the Asian session. On the upside, 1.58 is possibly seen as its
next resistance level.
In contrast, the euro weakened to an 8-day low of 1.7663 against
the kiwi from Thursday's closing value of 1.7702. The euro is
poised to find support around the 1.74 level.
Data from Statistics New Zealand showed that consumer prices in
New Zealand rose 0.7 percent on quarter in the third quarter of
That was shy of expectations for an increase of 0.9 percent on
quarter following the 0.5 percent contraction in the three months
The single currency fell back to 1.6555 against the aussie, not
far from a 4-day low of 1.6553 seen in the previous session. Next
key support for the currency is likely seen around the 1.62
The latest survey from IHS Markit showed that the manufacturing
sector in Australia continued to expand in October, albeit at a
slower pace, with a manufacturing PMI score of 54.2.
That's down from 55.4 in September, although it remains above
the boom-or-bust line of 50 that separates expansion from
Looking ahead, Markit's U.S. flash composite PMI for October is
scheduled for release in the New York session.