Euro Advances On Fed Rate Cut Hopes, Upbeat Eurozone Business Growth

Date : 06/05/2019 @ 2:09PM
Source : RTTF2
Stock : Euro vs New Zealand Dollar (EURNZD)
Quote : 1.729635  0.00264 (0.15%) @ 11:10PM
Euro vs NZD share price Chart

Euro Advances On Fed Rate Cut Hopes, Upbeat Eurozone Business Growth

Euro vs NZD (FX:EURNZD)
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6 Months : From May 2019 to Nov 2019

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The euro strengthened against its key counterparts in the European session on Wednesday, as investors cheered hints of a Fed rate cut this year as well as a data showing improvement in Eurozone private sector activity in May.

Final data from IHS Markit showed that the euro area private sector expanded more than initially estimated in May, extending the current sequence of growth to just below six years.

The composite output index rose to a 3-month high of 51.8 in May from 51.5 in April. The reading was slightly above the flash 51.6.

In Germany, the private sector growth improved to a three-month high. At 52.6, the latest composite PMI reading was up from 52.2 in April. The score for May was revised up from 52.4.

Likewise, the services PMI came in at 55.4, up from 55.7 in April and the flash 55.0. Federal Reserve Chairman Jerome Powell on Tuesday sent a strong signal that the U.S. central bank is ready to consider cutting interest rates later this year to sustain growth.

Speaking in Chicago, Powell said that the Fed would 'act as appropriate to sustain the expansion.'

The currency traded mixed against its major opponents in the Asian session. While it held steady against the pound and the yen, it rose against the greenback and the franc.

The euro advanced to a 2-day high of 1.1194 against the franc, from a low of 1.1156 hit at 5:00 pm ET. If the euro rallies further, 1.13 is likely seen as its next resistance level.

The European currency spiked up to 1.1285 against the greenback, its biggest since April 18. The euro is seen finding resistance around the 1.14 region.

The euro that closed Tuesday's trading at 121.68 against the yen appreciated to a 6-day high of 122.21. The next possible resistance for the euro is seen around the 124.00 level.

The latest survey from Nikkei showed that Japan services sector continued to expand in May, albeit at a slower pace, with a services PMI score of 51.7.

That's down marginally from 51.8 in April, although it remains above the boom-or-bust line of 50 that separates expansion from contraction.

The euro was trading higher at 1.6116 against the aussie and 1.6981 against the kiwi, from its early low of 1.6082 and a 4-week low of 1.6950, respectively. The euro is likely to test resistance around 1.63 against the aussie and 1.72 against the kiwi.

Recovering from a 5-day low of 1.5061 hit at 2:55 am ET, the euro reached as high as 1.5093 against the loonie. On the upside, 1.52 is possibly seen as the next resistance level for the euro.

The euro edged higher to 0.8878 against the pound, following a low of 0.8854 seen at 5:00 pm ET. The euro is poised to test resistance around the 0.90 mark.

Looking ahead, at 8:15 am ET, ADP private sector payrolls for May are scheduled for release.

The U.S. ISM non-manufacturing composite index for May and Federal Reserve's Beige book report will be out in the New York session.

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P: V:fm D:20191118 15:25:31