The euro rose against the dollar for the first time in four days on Thursday, helped by signs of a recovery in French business activity, although a slowdown in Germany’s private sector kept the gains limited.

Markit’s flash composite Purchasing Managers’ Index (PMI) for Germany, which tracks manufacturing and services activity accounting for more than two-thirds of the economy, dropped from April’s final reading.

For France, data compiler Markit said its preliminary composite purchasing managers index moved further above the 50-point threshold denoting expansions in activity.

The euro hit a high of $1.11435 after the French data was released, before it gave up some of those gains to trade at $1.1112 after the German numbers. That still left it 0.2 per cent higher on the day, and off a three-week low of $1.1062 struck on Wednesday.

“The French PMI put a bid on the euro but the German data was disappointing. In the first-quarter, economic data from the euro area was positive, but in April and May it’s showing signs of a slowdown. All in all, it’s too early for any tapering in the quantitative easing programme by the European Central Bank,’’ said Yujiro Goto, currency strategist at Nomura.

“We think the euro will gradually decline.’’

Fed minutes

The euro’s gains saw the dollar step back from a two-week peak against a basket of major currencies with the minutes from the Federal Reserve’s latest meeting offering no major surprises for investors. It did little to change expectations that the Fed will probably wait until late this year before raising interest rates.

The minutes showed policymakers believed it would be premature to raise rates in June, in line with a view widely held in the market after a dismal start to the year.

The dollar index stood at 95.374, having risen as high as 95.837 on Wednesday.

“Although they contained no outright surprises, the April FOMC minutes showed a few signs of participants growing more concerned about downside risks to the economic outlook, with little mention of offsetting upside risks,’’ analysts at JPMorgan wrote in a note.

“At this point, we also consider every meeting going forward to be ‘live’, although the last several months' deterioration in the growth data leave June or July looking increasingly unlikely. We still look for lift-off in September.’’

Against the yen, the greenback fell 0.3 per cent to 120.95 yen, having hit a two-month peak of 121.49 on Wednesday.

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