EUR/USD Mixed on Improved PMI Data in EZ and US, US Dollar Higher
European PMIs positively surprised market participants on Wednesday with EZ Manufacturing PMI rising above 50 for the first time since July 2011, providing an early indication that recession could come to an end. European stocks closed yesterday in positive light with FTSE 100 rising by 0.35%, DAX up by 0.78% and CAC gaining 1.01%. The Euro versus the US dollar initially advanced as high as 1.3253 following PMI releases but then came down again as US data positively surprised as well markets.
US Manufacturing PMI stood at 53.2, higher than expected at 52.5 and that supported the greenback in two ways, firstly due to its direct positive effect and secondly through increasing chances of FED tapering its bond buying program. In addition, US New Home Sales increased by 497k in June, more than anticipated and up from revised 459k, further supporting the greenback.
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