The euro erased early losses against the U.S. dollar in thin holiday trade on Monday, after a report showed that manufacturing activity in the euro zone expanded at the second-fastest rate since August 2000 last month.
EUR/USD clawed back up from 1.4762, the pair’s lowest since April 27, to hit 1.4851 during European early afternoon trade, gaining 0.30%.
The pair was likely to find support at 1.4631, the low of April 27 and short-term resistance at 1.4877, Friday’s high and a 16-month high.
The final Markit Manufacturing Purchasing Managers’ Index rose to 58 in April from 57.5 in March, indicating that factory output rose at a faster rate than in the previous month.
The final PMI was higher than the preliminary estimate of 57.7 released last month. A reading above 50 indicates that activity increased, while a reading below 50 indicates that it decreased.
However, the pickup in growth was largely driven by German and French factories, while activity in the Italian and Spanish manufacturing sectors grew at a slower pace.
Earlier Monday, the dollar climbed boosted by news that that Al Qaeda leader Osama Bin Laden had been killed by U.S. Special Forces in Pakistan.
The euro was also up against the yen, with EUR/JPY rising 0.51% to hit 120.83.
Later in the day, the U.S. Institute for Supply Management was to publish its manufacturing PMI.
ForexPros.com
