Euro surges ahead as Eurozone economy sparkles — FX Focus

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Eurozone private sector activity expanded at the fastest pace in nearly six years in March, amid robust new orders and employment growth in both manufacturing and service sectors.

The PMIs also showed that employment in the services and manufacturing sectors was rising at the fastest rate since July 2007, which could be an important factor in supporting consumer spending, which is otherwise facing higher inflation and limited wage growth in most countries.

Although Mark Rutte fended off Geert Wilders' Freedom Party in last week's Dutch elections, Marine Le Pen is likely to be in the final run-off for the French presidency in May, and German Chancellor Angela Merkel faces elections.

"Worries about consumer spending and business confidence haven't emerged yet and the European Central Bank could be behind the curve", he said.

The reading, a 70-month high, overshot the consensus forecast in a Reuters poll of economists and was above the 50 mark that separates growth from contraction.

"Meanwhile, a high level of business optimism continues to have a positive influence on firms hiring decisions, and can be attributed to a widespread expectation of pro-business policies after May's presidential elections".

IHS Markit readings in both German and France - Europe's largest economies - also showed activity hitting the fastest pace in almost six years, with the manufacturing sector powering the advance in Germany and services supporting growth in France.

The euro area services PMI improved unexpectedly to 56.5 from 55.5 in February.

The services PMI climbed more-than-expected to 55.6 in March from 54.4 in February.

The composite output index, which measures the combined output of both the manufacturing and service sectors advanced to 57.0 from 56.1, compared to expectations for 56.0. The expected reading was 56.1.