NEW YORK (Forex News Now) – The euro surged against the dollar on Tuesday, hitting an 8-month high, after an industry report showed that activity in the U.S. non-manufacturing sector grew more than forecast in September.
In European afternoon currency market trading, EUR/USD hit 1.3851, its highest since Feb. 4. The currency pair later retreated slightly to trade at 1.3833, up 1.08 percent on the day.
The Institute for Supply Management said earlier that its index of non-manufacturing activity, based on surveyed U.S. purchasing managers in mostly service sector firms, rose to 53.2 during the month, up from 51.5 in August. Analysts had expected a more modest increase to 53.2 in September, two major currency market trading news outlets reported.
According to EUR USD analysis, EUR/USD was likely to touch support around last Thursday’s low, 1.356, and encounter resistance around the high of Feb. 3, 1.4026.
The euro’s gains also came after mixed economic data in the euro zone: Official reports showed that while retail sales slid in August, defying forecasts, activity in the services sector rose unexpectedly in September.
Elsewhere, the euro slid advanced versus sterling: EUR/GBP traded at 0.8696, up 0.57 percent, according to intraday analysis.