The euro was stronger against the lower-yielding dollar and yen on Monday in New York. Traders pondered data showing the European Commission expects the EU economy to broadly stabilize on support measures in 2010 after experiencing the deepest recession in the post-war era.
The euro gained on the dollar and challenged its highest level in nearly a month. The single currency reached as high as 1.3383 in the late morning. If it gets above 1.3390, the euro will reach its best level since April 3.
A National Association of Realtors report showed that pending home sales index rose 3.2 percent in March following a downwardly revised 2.0 percent increase in February. Economists had expected the index to come in unchanged following the 2.1 percent increase originally reported for the previous month.
The euro remained in a range with the sterling after falling towards near-term support in recent days. The single currency moved at around 0.8930 after hitting as low as 0.8883 on Sunday evening. If the euro breaks below 0.8881, it will reach a 12-day low.
Finance ministers from across Asia agreed to set up a $120 billion emergency fund to be launched by the end of the year to enhance Asian countries' ability to counter the global financial meltdown, guaranteeing the safety of their foreign reserve and attracting overseas investment with a more secure capital environment.
The euro leveled off at a three-week high of 132.86 against the Japanese yen on Monday. The European currency trended higher for much of last week.
In the Eurozone, the Brussels-based European Commission expects the 16-nation area to contract 4% in 2009 and 0.1% next year. In its interim forecast in January, the commission said the euro area will contract 1.9% in 2009 and will grow 0.4% in 2010.
For the larger EU, the commission projected a 4% contraction this year, making it the worst recession since World War II. However, the economy is expected to regain momentum in the course of 2010 due to the impact of fiscal and monetary stimulus measures. Interim forecasts for the EU had shown a 1.8% contraction in 2009 and 0.5% growth in the coming year.
The pace of slowdown in Eurozone manufacturing activity eased in April, reports said citing survey data from the Markit Economics. The purchasing managers' index, or PMI, rose to a six-month high of 36.8 in April from 33.9 in March. It was also an increase from the initial estimate of 36.7. Economists had forecast the PMI to remain at its flash reading. A PMI reading below 50 suggests contraction in the sector.
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