Euro Rises After Eurozone PMI Data

The euro strengthened against most major currencies in the early European session on Thursday, after data showed that the Eurozone private sector activity expanded in May.

Data from Markit showed that the Euro-area flash manufacturing PMI rose to 52.3 in May from 52 in the prior month. It was forecast to fall to 51.8. The survey revealed that the rate of expansion remained sufficiently robust to encourage firms to take on extra staff at the fastest rate for four years. The 19-nation currency started rising after data showed that the French private sector expanded at a moderate pace in May.

The French manufacturing PMI came in at 49.3, up from 48 in April and exceeded the forecast of 48.5. Nonetheless, a reading below 50 indicates contraction in the sector.

The currency little changed after the German private sector report.

Germany's private sector grew at the slowest pace in five months in May. The manufacturing PMI declined to 51.4 from 52.1 a month ago and it was below the expected reading of 52.

The services Purchasing Managers' Index also dropped to 52.9 from 54 in April. It was forecast to fall marginally to 53.9.

Traders await the European Central Bank's account of its most recent monetary policy meeting on April 14-15. Focus will be also on the European Union leaders meeting set to begin in Riga, Latvia later today, where discussions on Greece bailout talks are held.

In the Asian session, the Euro held steady against its major rivals.

In the European trading today, the euro rose to 2-day highs of 1.1171 against the U.S. dollar, 1.4140 against the Australian dollar, 1.5251 against the NZ dollar and 135.01 against the yen, from early lows of 1.1079, 1.4041, 1.5139 and 134.22, respectively. If the euro extends its uptrend, it is likely to find resistance around 1.15 against the greenback, 1.44 against the aussie, 1.55 against the kiwi and 138.00 against the yen.

Against the Swiss franc and the Canadian dollar, the euro advanced to 1.0417 and 1.3611 from an early 1-week low of 1.0384 and an 8-day low of 1.3516, respectively. The euro may test resistance near 1.05 against the franc and 1.39 against the loonie.

Looking ahead, U.S. weekly jobless claims for the week ended May 16, Markit's flash manufacturing PMI for May, U.S. existing home sales and leading indicators for April are due to be released in the New York session.

At 1:30 pm ET, European Central Bank President Mario Draghi will deliver opening remarks at the ECB Forum on Central Banking titled "Inflation and Unemployment in Europe," in Portugal.

Subsequently, Federal Reserve Governor Stanley Fischer will deliver a speech on "Inflation and Unemployment in Europe," at the ECB Forum.