Euro pushes back against dollar

Written by admin on 07/30/2019 Categories: 佛山桑拿网

The euro headed higher against the dollar helped by an improvement in eurozone business activity this month.

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Boosted by gains from France, the Eurozone Composite purchasing managers index reached 53.2 in March and follows a 53.3 reading in February.

And with a slight acceleration in new orders, the data suggests growth could continue in April.

At around 2200 GMT on Monday (0900 Tuesday AEDT) the euro traded at $US1.3835, up from $US1.3794 late Friday.

The euro gained to 141.48 yen from 141.04. Meanwhile, the dollar was virtually flat at 102.26 yen.

The British pound also pushed higher, to $US1.6495 from $US1.6486.

Martin van Vliet, an economist at ING, called the fact that eurozone growth held up despite turbulence from the Ukraine crisis “welcome and fairly surprising” news.

But he warned that a weakening of China’s PMI, along with a relatively strong euro, “do not bode well for export growth momentum,” while unemployment and fiscal policy constraints mean domestic demand is unlikely to pick up soon.

“That said, the further sign of recovery will encourage the ECB in refraining from further monetary easing, at least in the short term,” van Vliet said.

Some analysts argued that the European policymakers believe the euro remains overvalued, and that the European Central bank is likely to work to bring it lower against the greenback.

“We continue to hear noise from the ‘broad’ ECB signaling significant concerns regarding currencies,” especially the euro, said Sebastien Galy of Societe Generale.

Galy said the ECB does not likely want to target the euro directly, especially given the zone’s extremely low inflation rate.

Instead, he said, “on the margin, the ECB is more likely to choose forms of easing that have more of a negative impact on the euro”.

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