RTTNews - The euro surged against its lower-yielding rivals on Monday as rising global stocks fueled risk appeal. With the gain, the European currency hit its best level since last September versus the dollar.
Stocks in the U.S. and Europe surged on Monday as traders bet the global recession has reached a bottom. When stocks are strong, the euro often rises against currencies such as the dollar and yen.
Slowdown in the Eurozone manufacturing activity decreased more than initially estimated in July, signaling a possible end to the recession, a survey from the Markit Economics showed Monday.
The euro rallied to its highest level in more than 10 months against the dollar, reaching 1.4444.
The U.S. Commerce Department revealed that construction spending rose 0.3 percent in June. This followed a revised 0.8 percent slide in May.
The U.S. Institute for Supply Management said in a report that its index of activity in the manufacturing sector rose to 48.9 in July from 44.8 in June.
The euro jumped to a seven-week high of 137.54 against the Japanese yen. With the rise, the euro rose above a near-term resistance level.
Meanwhile, the euro fell to a five-week low against the sterling, dropping to 0.8461 before recovering most of its daily losses.
In the UK, PMI rose to 50.8 in July from an upwardly revised 47.4 in June. Economists had expected the index to rise to 47.7. This was the first time the index climbed above 50 since March 2008.
In the Eurozone, the final PMI figure rose to an 11-month high of 46.3 in July from 42.6 in June. The index also stood above the flash estimate of 46. This was the second strongest rise in points terms in the survey history. However, the index is still below the neutral level of 50, showing a contraction in the sector.
In Germany, PMI rose to 45.7 in July from 40.9 in June. It was also above the flash estimate of 45.2. This was the highest for ten months, but still below the neutral 50.0 mark.
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