Euro advances on improving service sector activity

<p>The euro has appreciated against the pound and dollar on improving services sector activity.</p>

The euro has made gains in forex trading this afternoon (February 5th), as key services sector data indicates the industry is improving.

Markit's purchasing managers' index (PMI) rose to 48.6 in January from 47.8 in December.

However, even though this was better than the previous month, it marked the services sector's 12th consecutive monthly decline because PMI data that is below the benchmark of 50 indicates contraction.

Therefore, even though the PMI data still shows shrinkage, the pace of decline is easing.

Chris Williamson, chief economist at Markit, stated: "The eurozone is showing clear signs of healing, with the downturn easing sharply in January and the region moving closer to stabilisation in the first quarter."

Much of the growth in the sector was witnessed in Germany, while fellow 'big four' economies France, Italy and Spain continue to lag behind.

At 16:50 GMT, the euro advanced by 0.5 per cent in trading with the dollar to €1 buying $1.358, while the single currency made 1.2 per cent gains versus the pound to £0.867.

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