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French manufacturing PMI was expected to jump over the critical 50 point mark and reach 50.3 points in October (from 49,8 in September). The 50 point mark separates growth and contraction. However, it disappointed with a drop to 49.4 points. Services PMI was predicted to edge up from 51 to 51.2 points. Also here, the score dropped to 50.2 points, hardly holding on in growth territory. Spain’s unemployment rate was predicted to slide from 26.3% to 26.1% and the actual result was 26% in Q3.

EUR/USD was already on a roll before the publication, climbing above the round 1.38 line and peaking at 1.3821.The French release weighed on the pair, but it holds above 1.38, at least for now.

Markit releases German PMIs soon. The all-European numbers follow. France is the second largest economy in the euro-zone (and in Europe) after Germany. Spain is ranked fourth in the euro-zone, after Italy. Yesterday, the Bank of Spain estimated a growth rate of 0.1% in Q3, ending the recent round of recession.

One of the factors pushing the euro higher is an improved global sentiment following the release of the Markit / HSBC Flash PMI for China. It rose to 50.9 points and sidelined fears about global growth. The risk on environment helps the common currency.

For more on the euro, see the EUR to USD forecast.