The euro spiked up against its major counterparts in the European session on Thursday, as optimism over U.S. government spending plan and strong euro area manufacturing PMI reports lifted European shares.
U.S. President Joe Biden announced a $2.3 trillion infrastructure spending plan on Wednesday, which includes investments in roads, railways, broadband, clean energy and semiconductor manufacture.
The plan will reshape the world’s largest economy and counter the rise of China.
Positive manufacturing data also boosted hopes for a speedy economic recovery.
Final data from IHS Markit showed that the euro area manufacturing sector grew at the strongest pace in nearly 24 years of data collection, underpinned by strong production and orders.
The final factory Purchasing Managers’ Index rose to 62.5 in March from 57.9 in February. The flash reading was 62.4.
The euro climbed to a 2-week high of 130.17 against the yen and more than a 3-week high of 1.1118 against the franc, off its early lows of 129.65 and 1.1058, respectively. The euro may challenge resistance around 132.00 against the yen and 1.12 against the franc.
The euro gained to 1.1751 against the greenback and 0.8534 against the pound, reversing from its early lows of 1.1713 and 0.8503, respectively. The euro is poised to find resistance around 1.20 against the greenback and 0.88 against the pound.
The euro was up against the kiwi, at a 3-day high of 1.6867. Against the aussie, the euro hit a 1-week high of 1.5553 and held steady thereafter. The next possible resistance for the euro is seen around 1.70 against the kiwi and 1.58 against the aussie.
The euro rose to 1.4788 against the loonie, from more than a 1-year low of 1.4725 hit at 6:00 pm ET. If the euro rises further, 1.49 is likely seen as its next resistance level.
Looking ahead, Canada building permits for February, U.S. weekly jobless claims for the week ended March 27, ISM manufacturing PMI for March and construction spending for February are set for release in the New York session.