The Euro strengthened against the US Dollar and other major peers on Tuesday but was unable to make gains against Sterling as both the Eurozone and UK saw the release of better-than-forecast economic data releases.
Data released by Markit showed that the Eurozone’s private sector grew at its fastest pace in close to three years in April as most nations saw an increase in business activity.
Manufacturing led the way in increases and the region’s service sector saw activity soar to its best level in 34 months.
Ireland saw its overall output growth soar to a 94-month high, Spain’s advanced to an 85-month high and Germany edged higher to a 2-month high.
France meanwhile continued to perform poorly with the Eurozone’s second largest economy posting its sharpest decline in activity in 2-months.
The overall Eurozone Services PMI came in at 53.1 in April whilst the composite PMI increased to 54.0, beating March’s figure of 53.1.
“The final PMI is led by Germany while France continues to lag, with the French PMI merely indicating near-stagnant growth. On the periphery the most exciting news is the strong upturns that are becoming apparent in Spain and Ireland, where the rates of growth rose to the fastest for seven and eight years respectively. Italy’s recovery is meanwhile also gaining momentum, with the pace of growth rising to one of the fastest seen over the past three years,” said Chris Williamson, chief economist at Markit.
Despite the strong data the Euro was unable to push higher against the Pound. Sterling was receiving support from a service sector PMI which showed that the UK’s dominant services sector strengthened more-than-expected in April.
Markit research group said the U.K. services purchasing managers’ index rose to a four-month high of 58.7 last month, from a reading of 57.6 in March.
The positive report added to last week’s strong manufacturing data and added to speculation that the UK economy is expanding faster than expected.
Pressure on the Bank of England to increase interest rates will also rise as a result of the positive data.
Euro (EUR) Exchange Rates
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