Euro soars against dollar as risk appetite picks up

NEW YORK (Forex News Now) – The euro soared against the dollar on Thursday, erasing the previous day’s losses, after a raft of upbeat data on the euro zone services and manufacturing sectors sharpened risk appetite.

In U.S. afternoon currency trading, EUR/USD traded at 1.2902, up 1.16 percent on the day.

Surveys by Market research firm Markit showed earlier that euro zone’s private sector expanded at a faster pace in July, lifted by an unexpected pickup in both the manufacturing and the services sectors.

Markit’s services purchasing managers index for the region increased from June’s 55.5 to 56 in July, while the manufacturing PMI for the euro zone rose from 55.6 in June to 56.5 in July.

According to forex analysis, EUR/USD was likely to touch support around Wednesday’s low, 1.2732, and encounter immediate resistance around Tuesday’s 2-month high, 1.3028.

Thursday also saw the release of mixed U.S. data: A key report showed that existing home sales climbed more than expected in June, but separate data showed that initial claims for unemployment benefits rose faster than forecast last week.

Meanwhile, the euro jumped versus the yen: EUR/JPY traded at 112.31, up 1.14 percent.