Euro Remains Close To Near-Term High Against Dollar

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The euro held recent gains against its lower yielding rivals on Monday in New York as global stocks moved higher, helping risk appeal. The European currency lingered near its best level against the dollar in almost a week.

The European currency had seen notable gains against the dollar on Friday after a disappointing employment report from the U.S. Before the rebound, the euro was near a 2 1/2-week low versus the buck.

Traders also considered data released Monday showing Eurozone economic activity grew more than initially expected in September, indicating a recovery in the third quarter.

The euro remained close to a near term-high against the U.S. dollar at 1.4650. If the European currency can break above 1.4654 it will reach a six-day high. The euro had reached a yearly high of 1.4843 in late September.

In the U.S., the Institute for Supply Management said its index of activity in the service sector rose to 50.9 in September from 48.4 in August, with a reading above 50 indicating growth in the sector. Economists had been expecting the index to increase to a reading of 50.0.

The euro reached a weekly high of 0.9197 against the British pound before moving back below 0.9180. The pair has been uncertain in recent days.

The UK government gross reserves stood at US$ 65.745 billion at the end of September, up from US$ 64.203 billion at the end of August, the HM Treasury said on Monday.

The euro was little-changed against the Japanese yen, remaining in the neighborhood of a 10-day high. The European currency moved near 131.25 in the early afternoon, slightly off its highs of the day near 131.50. The euro needs to get above 131.02 to reach a 10-day best.

In the Eurozone, the Composite Output Index stood at 51.1 in September, higher than the flash reading of 50.8 and up from the 50.4 in August, a survey conducted by Markit Economics showed Monday. A reading above 50 suggests expansion in the private sector activity, while a reading below 50 indicates contraction.

Meanwhile, the Eurostat reported that Eurozone retail sales declined 0.2% month-on-month in August, matching the pace registered in July. Economists were looking for a larger fall of 0.4%.

(Market News Provided by RTTNews)