The euro traded within a tight range against the US dollar on Monday, following a mixed picture that was painted by new readings for the services sector within major European economies. A lack of major economic releases in the United States today left traders anticipating additional information on the Republican tax reform plan, which kept the dollar little changed since Friday.
IHS Markit, which releases monthly updates for economic activity in major economies ahead of official data, said today that activity within the service sector improved in the eurozone. The regionâs services purchasing managersâ index edged marginally higher to 55.0 in October from 54.9 in September. Readings above 50 indicate growth.
The inflow of new businesses increased in October, which added to the positive effect from a higher growth of output and outstanding business. As a result, European companies hired more workers, which led to the highest job creation pace in a decade as employment improved in Germany, France, and Spain.
Business activity in France also improved, as the nationâs services activity index rose to 57.3 last month from 57.0 in September. New orders expanded, which helped maintain the growth rate near its highest level in six and a half years.
However, the growth of the services sector slowed down in Germany from 55.6 to 54.7. The slowdown in Germany stemmed from weaker performance in the hotels and restaurants sector, which added to lower activity in the telecommunication sector.
A separate report from the German Economic Affairs and Energy Ministry showed that factory orders unexpectedly rose for the second month in a row in September. Following a 4.1% gain in August, the value of factory orders rose 1% in September after adjusting for seasonal changes and inflation. Analysts had forecast a 1.5% drop.
Following these releases, the shared currency held steady against the greenback after falling on Friday in the wake of upbeat US factory orders and business activity. Trading was quiet today as investors awaited further clarity on the Republican tax reform plan.
EUR/USD traded at 1.1590 as of 12:45 GMT on Monday after touching 1.1584 at 11:35 GMT, the pairâs lowest level since October 27. EUR/USD began trading today at 1.1598.
EUR/GBP was at 0.8842 from 0.8838 at 12:05 GMT, a level last seen on November 2. EUR/GBP started the day at 0.8879.
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