Eurozone PMI Injects Optimism into the Market

The euro climbed on Thursday morning after positive data renewed hope that the eurozone would return to growth at the end of the year. The common currency rose to $1.3215 at 7:04 GMT on Thursday. According to the

, the eurozone's business activity picked up in July for the first time in 18 months. The region's purchasing managers' index came in at 50.4, which indicates growth as the figure is over the 50 point benchmark. The PMI data coupled with an encouraging consumer confidence survey released by the European Commission on Tuesday has many hopeful that the block stabilized in the second quarter.

PMI data for individual eurozone countries contributed heavily to the euro's strength. German purchasing managers' data showed that the powerhouse nation's business activity was growing at its fastest pace since February. The renewed strength indicates increasing domestic demand. Despite the positive PMI data, most are not expecting to see a huge recovery in the eurozone for some time. The modest growth the PMI surveys indicated is not nearly enough to counteract the region's sky high unemployment figures. Most expect that the European Central Bank will have to do more through policy changes to help solve the region's financial crisis. The ECB is likely to celebrate this recent positive data, however most economists say the bank will need to continue supporting the region's recovery if it is to gain momentum. Although the PMI data was positive for the eurozone and its recovery, the data also showed that the Chinese economy, a major source of demand for German exports, was slowing down.