The euro appreciated against its major counterparts in European deals on Tuesday, as solid China data coupled with progress on COVID-19 vaccine developments spurred hopes for global economic recovery.

The manufacturing sector in China continued to expand in November, and at a faster pace, the latest survey from Caixin revealed with a manufacturing PMI score of 54.9, up from 53.6 in October. This was the highest score since November 2010.

Individually, output and new orders both surged at the fastest rates in 10 years, while employment expanded at its fastest pace since 2011.

Speculation that the Federal Reserve might act to support the economy through a tough winter also boosted sentiment.

In testimony released ahead of a Tuesday hearing before the Senate Banking Committee, Federal Reserve Chair Jerome Powell cautioned lawmakers that significant challenges and uncertainties remain until Covid-19 vaccines clear production and distribution hurdles.

Final data from IHS Markit showed that the euro area manufacturing sector expanded for the fifth successive month in November despite new lockdown measures.

The final factory Purchasing Managers’ Index fell to 53.8 in November from 54.8 in October.

The euro approached 0.8978 against the pound, from a 4-day low of 0.8929 set at 3:00 am ET. The next likely resistance for the euro is seen around the 0.92 level.

Data from the Nationwide Building Society showed that UK house prices rose the most in nearly six years in November, but the outlook remains highly uncertain and the housing market activity is set to slow in the coming quarters amid a surge in the coronavirus pandemic that has forced a partial lockdown in some regions

The house price index rose 6.5 percent year-on-year, which was the fastest pace of increase since January 2015. House price inflation was 5.8 percent in October. Economists had forecast a 5.5 percent increase.

The euro strengthened to 1.1985 against the greenback, compared to 1.1923 hit late New York Monday. On the upside, 1.22 is possibly seen as its next resistance level.

The euro climbed to 124.96 against the yen, after falling to 124.35 at 5:00 pm ET. The currency may test resistance around the 128.00 level.

The latest survey from Jibun bank showed that Japan manufacturing sector continued to contract in November, albeit at a slower pace, with a manufacturing PMI score of 49.0.

That’s up from 48.7 in October although it remains beneath the boom-or-bust line of 50 that separates expansion from contraction.

The euro that closed Monday’s trading session at 1.0814 against the franc touched a 6-day high of 1.0860. The euro is likely to face resistance around the 1.10 region, if it gains again.

The euro was up at 1.7039 versus the kiwi and 1.5547 versus the loonie, off its previous lows of 1.6981 and 1.5497, respectively. The euro is poised to challenge resistance around 1.75 versus the kiwi and 1.58 versus the loonie.

The euro was higher at near a 2-week high of 1.6296 versus the aussie, following a fall to 1.6215 at 6:45 pm ET. The euro is seen finding resistance around the 1.65 mark.

The Reserve Bank of Australia retained its key interest rate and asserted to keep the record low rate for at least three years.

The policy board of the RBA headed by the governor Philip Lowe decided to leave its key rate unchanged at a record low of 0.10 percent.

Looking ahead, Canada GDP data for the third quarter, U.S. ISM manufacturing index for November and construction spending for October are due in the New York session.

Federal Reserve Chair Jerome Powell testifies on the CARES Act before the Committee on Banking, Housing, and Urban Affairs, in Washington DC at 10:00 am ET.

The material has been provided by InstaForex Company – www.instaforex.com

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