Euro Strengthens As Eurozone Business Activity Improves To 9-month High
CANBERA (dpa-AFX) - The euro moved higher against its major trading partners in the European session on Friday, as Eurozone business activity accelerated in April to the highest since last July due to a record expansion in manufacturing output and a return to growth in the service sector after the imposition of restrictions.
Flash data from IHS Markit showed that the composite PMI rose to 53.7 in April from 53.2 in March. The expected score was 52.8.
The services PMI climbed to an 8-month high of 50.3 from 49.6 in March. Economists had expected a score of 49.1.
Preserving favorable financing conditions over the pandemic period remains essential to reduce uncertainty and bolster confidence, thereby underpinning economic activity and safeguarding medium-term price stability, ECB President Lagarde said at a press conference on Thursday.
The central bank said last month it was going to increase government bond purchases though still within the planned envelope of 1.85 trillion euros ($2.2 trillion) until March 2022 to address rising bond yields in the euro zone. At the time, the ECB expressed concerns with borrowing costs rising sharply for euro area governments before the economy has fully recovered from the coronavirus shock.
As a result, data from Deutsche Bank showed the ECB purchased 74 billion euros in bonds in March, up from 53 billion and 60 billion euros in February and January.
By CNBC.com staff, CNBC •
Updated 3 hours ago
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European Central Bank President Christine Lagarde said the institution isnât discussing the phasing out of its emergency bond buying even as it sees signs that the economy is starting to shake off the coronavirus pandemic.
While noting that medium-term risks for growth are balanced, she pushed back against any suggestion the ECB is thinking about scaling back stimulus, describing the idea as âpremature.â
âIncoming economic data, surveys and high-frequency indicators suggest that economic activity may have contracted again in the first quarter of this year, but point to a resumption of growth in the second quarter,â Lagarde said Thursday after the institution kept its stimulus program in place. âAny phasing out was not discussed and it is just premature.â