2016.07.2205:42:00UTC+00Euro Rises As Eurozone PMI Falls Less Than Expected

The euro strengthened against most major rivals in the early European session on Friday, after data showed that the flash eurozone composite purchasing managers' index fell less than expected in July.

Data from the Markit showed Eurozone private sector expanded at the weakest pace in one-and-a-half-years in July. The flash composite output index fell to 52.9 in July, an 18-month low, from 53.1 in June. Nonetheless, the score was above the expected level of 52.5.

The services Purchasing Managers' Index dropped marginally to 52.7 from 52.8 in June. The score was expected to drop to 52.3.

Also, Germany's private sector expanded at the fastest pace in seven months in July. The flash composite output index rose to 55.3 from 54.4 in June. The index reached its highest level in 2016 so far with both manufacturers and service providers reporting stronger expansions.

The services Purchasing Managers' Index climbed unexpectedly to 54.6 from 53.7 a month ago. It was forecast to drop to 53.2.

The manufacturing PMI dropped less-than-expected to 53.7 from 54.5 in the previous month. The score was expected to fall to 53.4.

Meanwhile, European shares rose amid gradual improvements in the corporate earning results.

In the Asian trading today, the euro held steady against its major rivals.

In the early European trading, the euro rose to 9-day high of 1.4494 against the Canadian dollar, from an early low of 1.4419. The euro may test resistance near the 1.46 area.

Against the U.S. dollar, the yen and the NZ dollar, the euro advanced to 1.1041, 117.23 and 1.5791 from early lows of 1.1016, 116.39 and 1.5715, respectively. If the euro extends its uptrend, it is likely to find resistance around 1.12 against the greenback, 123.00 against the yen and 1.61 against the kiwi.

The euro edged up to 0.8378 against the pound, from an early 1-week low of 0.8299. The euro is likely to find resistance around the 0.86 area.

Data from Markit showed that the flash U.K. composite output index fell to an 87-month low of 47.7 in July from 52.4 in June. The services Purchasing Managers' Index dropped more-than-expected to 47.4, an 88-month low, from 52.3 in the previous month. The expected level was 48.8.

The manufacturing PMI came in at 49.1, down from 52.1 in June, but slightly above the expected score of 48.7. This was the lowest score in 41 months.

Meanwhile, the euro rose to 1.0876 against the Swiss franc, from an early 2-day low of 1.0858 and held steady thereafter.

Against the Australian dollar, the euro edged up to 1.4777 from an early low of 1.4691 and held steady thereafter.

Looking ahead, Canada consumer prices and producer price indexes for June, Canadian retail sales data for May, flash U.S. manufacturing PMI for July and U.S. Baker Hughes rig count data are due for release in the New York session.