Investing.com - The euro erased losses against the dollar on Wednesday after data showing manufacturing activity across the euro area grew at the fastest rate in 10 months in March, indicating that the recovery in the region is continuing to gain traction.
EUR/USD was last at 1.0749, up from session lows of 1.0719.
The euro was boosted after research firm Markit said its manufacturing purchasing managers' index rose to a 10-month high of 52.2 last month, higher than the preliminary reading of 51.9 and ahead of forecasts for an unchanged reading.
Markit said new orders rose at the fastest pace in almost a year, while companies added to payrolls at the quickest rate in three-and-a-half years, indicating optimism that the upturn will continue in the coming months.
Growth accelerated in Ireland, Spain, Italy, Germany and the Netherlands as the weaker euro benefited producers and boosted competitiveness in export markets.
The report also showed that factory input prices rose for the first time in seven months and selling prices were broadly stable, indicating that deflationary pressures are easing.
The euro also gained ground against the yen and the pound, with EUR/JPY rising 0.17% to 129.12 and EUR/GBP advancing 0.48% to 0.7277.
Sterling remained under pressure as political uncertainty ahead of the U.K.'s May 7 election overshadowed stronger-than-expected manufacturing data.
The U.K. manufacturing PMI rose to an eight-month high of 54.4 in March from 54.0 in February, boosted by strong domestic demand.
Demand for the dollar continued to be underpinned as investors turned their attention to the latest U.S. jobs report, due out on Friday, which was expected to support expectations for higher interest rates.
The U.S. was to release the ADP report on private sector jobs creation later in the day.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, ticked up 0.09% to 98.77.