The euro rose against the dollar Wednesday as hopes of a trade agreement with the United States and China boosted global risk appetite, while strong economic data from Australia and China boosted the Australian dollar.
The Financial Times reports that the United States and China are closer to reaching a final trade agreement.
"Later yesterday, reports that the United States and China were close to finalizing trade agreements boosted market sentiment and the euro was boosted as a result," said Richard Franulovich, head of foreign exchange strategy at Westpac Banking Corp.
European service sector data were better than expected, further supporting the euro, and German 10-year bond yields returned to above zero. The purchasing managers index (PMI) for services in the eurozone rose from 52.8 to 53.3 in March, with an initial value of 52.7.
"Today's PMI is not strong, but certainly better than expected," Franulovich said.
EUR = D3 rose 0.35% to $1.1241. On Tuesday, the euro fell to its lowest level in more than three weeks, close to $1.1174, and if it falls below that level, it will fall to its lowest level since June 2017.
The dollar weakened after data showed that service sector activity in the United States slowed to a low of more than a year and a half in March, underscoring the weakening economic momentum as new orders fell sharply, supporting the Federal Reserve's (FED/Federal Reserve) moratorium on interest rate hikes this year.
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