Eurozone PMI Data Adds to Fuel to Euro Exchange Rate Rally

Nokia jumped 6.43 percent in Helsinki after the network giant settled a patent dispute with Apple.

IHS Markit Economics' Composite PMI reading of Eurozone growth rose to 56.8 in May, up from 56.7 in the previous month and the highest tally since 2011.

A raft of fresh economic data from Germany is showing that businesses are doing better than expected, benefitting from higher demand at home and overseas, and setting the economy on track for further expansion.

Trevor Balchin, senior economist at IHS Markit, said the flash PMI data for May signaled no let-up in German economic growth and were signaling "continued positive momentum". The index, compiled by data firm IHS Markit, remained at 56.8 this month - on a par with April's six-year high and well above the crucial 50 figure that marks an expansion in activity. The expected reading was 56.6.

An index measuring output, which feeds into the composite PMI, rose to 58.4 from 57.9, also the highest since April 2011.

The survey's employment index rose to its highest level in almost six years.

Indicators for France and Germany, the region's two largest economies, published on Tuesday suggested the recovery was becoming stronger and broader while the Ifo index of German business sentiment reached its most bullish level since the country's reunification in 1991. The reading was expected to rise marginally to 113.1 from April's initial estimate of 112.9. Official flash data said the bloc's economy grew 0.5 percent in the first quarter.

According to Chris Williamson, chief business economist at HIS Markit, historical comparisons of the PMI against gross domestic product (GDP) indicates that the PMI is running at a level broadly consistent with the economy growing at a 0.4% quarterly rate or 1.5% annually, however once second quarter numbers come in they could be better.

NEW YORK, May 23 (Reuters) - Shares climbed across the euro zone on Tuesday after data showed robust growth, and Wall Street ticked higher as a US federal budget proposal called for slashing healthcare programs and boosting military spending.

May's further rise in consumer confidence fuels hope that Eurozone consumers will be prepared to keep spending at a decent rate despite higher inflation eating into their purchasing power, Archer said.

  • Zachary Reyes