Series of PMIs out the Euro zone sent EUR/USD to session highs

The euro climbed to its highest level on trading Thursday, after a report revealed that activity in the Euro region increased at its fastest pace in two years in August.

EUR/USD hit a session high at 1.3363 at 8:01 GMT, after which consolidation followed at 1.3356. The pair was to find support at current session low 1.3320, while resistance was to be seen at psychological 1.3400 level.

Today Markit Economics reported that Euro zone’s Advance Manufacturing PMI improved to 51.3 in the month of August from 50.3 a month ago, marking the highest point in 26 months and outperforming expectations of a value of 50.7. Advance Services PMI in the common currency bloc rose to 51.0 in August from 49.8 in July, again above the expected reading of 50.2. This data suggested that economy in the region may continue expanding during the third quarter of the year, after the Gross Domestic Product of the bloc grew by 0.3% in the second three months. Positive results were contributed to by the better than projected performance of activity in Germany.

Manufacturing activity in euro regions largest economy expanded at the fastest rate in more than two years in August, easing concerns that the country could still be experiencing the effects of the debt crisis, which hit neighboring countries. Markit reported that German advance reading of manufacturing PMI rose to 52.0 in August after the final reading of 50.7 in July. Experts had projected that manufacturing activity will expand less, to 51.1. Values above 50.0 usually indicate that activity in the sector has increased. At the same time, activity in German sector of services reached its highest level in six years in August. Advance Services PMI rose to a reading of 52.4 from 51.3 in July, while preliminary estimates showed a lesser advance to 51.7.

On the other hand, the recorded slow down in activity in the French private sector deepened in August, dimming expectations of a strong economic growth during the third quarter of the year. Advance Manufacturing PMI in France remained in the contraction zone, standing at 49.7 in August, the same level as in July, while estimates pointed a reading of 50.2. French Advance Services PMI fell to a reading of 47.7 in August from 48.6 in July, while experts had anticipated that the index will advance to 49.2.

Earlier the common currency fell to session lows against the greenback, after the minutes of the Federal Reserve Banks July meeting revealed that policymakers were “broadly comfortable” with Chairman Bernankes suggested time frame to pare back the 85 billion US dollar-per-month stimulus program by the end of the year.

Elsewhere, the euro was gaining ground against the British pound, as EUR/GBP cross added 0.42% to trade at 0.8568 at 9:20 GMT. EUR/JPY pair advanced even more, by 0.85% to trade at 131.58 at 9:20 GMT.