During early European deals on Wednesday, the euro strengthened to fresh multi-month highs against its U.S. and U.K. counterparts on the back of a rise in European equities. The euro also climbed to a 12-day high against the franc and hovered near a 2-month high against the yen.
European stocks opened higher today as most Asian equities closed higher on encouraging results from the Bank of Japan’s Tankan survey and Chinese PMI data.
Investor sentiment was also lifted by growing speculation that the Federal Reserve is likely to introduce more stimulus measures to support the U.S. economy.
The Bank of Japan’s quarterly Tankan survey showed that the large manufacturers’ index hit a fresh two-year high in the third quarter of 2010, gaining for the sixth straight quarter while posting a score of 8. That beat expectations for a score of 7 following the Q2 reading of 1.
China’s manufacturing activity picked up to a five-month high in September, survey data showed. However, it was still well away from the record high levels registered at the start of the year.
Markit Economics said the HSBC manufacturing purchasing managers’ index was at a seasonally adjusted 52.9, up from 51.9 in August.
The euro spiked higher against the dollar in early European session on Wednesday. The euro-dollar pair that closed yesterday’s trading at 1.3586 is currently worth 1.3639. This set the highest point for the euro since April 15, 2010. The next upside target level for the euro is seen at 1.370.
The euro that showed choppy trading against the Swiss franc in Asian deals on Wednesday gained ground in early European session. Currently, the euro-franc pair is trading at a 12-day high of 1.3323, compared to 1.3258 hit late New York Tuesday. On the upside, 1.339 is seen as the next target level for the European currency.
After hitting a low of 0.8573 against the pound at 2:40 am ET Wednesday, the euro strengthened. The euro-pound pair is presently trading at a fresh 4-month high of 0.8615. If the euro climbs further, it may likely target the 0.875 level. The pair closed yesterday’s trading at 0.8600.
The euro that declined against the currency of Japan in late Asian deals on Wednesday recouped some of its losses in early European session. As of now, the euro-yen pair is worth 114.0, up from a low of 113.52 hit at 2:40 am ET. If the euro advances further, it may likely target an early Asian session’s 2-month high of 114.2.
Looking ahead, the U.K. final figures of money supply and mortgage approvals data – both for August are expected at 4:30 am ET.
At 5:00 am ET, the European Commission is slated to release economic and consumer sentiment figures for September.
There are no major economic reports due to be released from the U.S. today.