Euro Steady Above $1.26 Ahead Of Stress Test Results

The euro was steady at $1.2646 at 7:00 GMT to finish the week after mixed PMI figures were released on Thursday. Meanwhile, investors tried to guess what the results of the European Central Bank's stress tests will look like ahead of their public release on Sunday. Markit released a composite purchasing managers' index on Thursday, which showed that the eurozone's manufacturing and services sectors increased to 52.2 in October from 52.0 in September. The figure continued to make its way above the 50 point mark that separates expansion and contraction, giving investors some hope that the eurozone's economy is on the rebound. However, the report raised some red flags as it showed that new orders rose only slightly, a bad sign for future gains in manufacturing and services activity. Investors have also been worrying about the results of the ECB's banking stress tests, due out on Sunday. The central bank evaluated the region's banks in order to determine their ability to stand up to extreme financial and economic conditions using the same parameters from country to country in an effort to streamline the financial system. While no details about the tests have been released, investors are already hedging their bets on how many banks have failed and how much capital will need to be raised over the next nine months. The Wall Street Journal reported that the Royal Bank of Scotland Group has estimated that the banks will need to find an additional 10.2 billion euros, an amount that would not be massively detrimental to the eurozone financial sector. Most expect that banks in struggling southern nations like Greece and Italy are more likely to have failed, with some analysts forecasting up to 19 eurozone banks failing.