NEW YORK (Reuters) – The euro gained against the greenback on Wednesday as hopes of a trade deal between the U.S. and China bolstered risk appetite globally, while the Australian dollar outperformed on strong local and Chinese economic data.

The Financial Times reported that the U.S. and China are closer to reaching a final trade agreement.

“Reports late yesterday that the U.S. and China are close to finalizing their trade deal buoyed sentiment across the board and the euro got a bit of a lift from that as well,” said Richard Franulovich, head of FX strategy at Westpac Banking Corp in New York.

Better than expected service sector data in Europe further helped the single currency as German 10-year Bund yields also headed back above zero. The services Purchasing Managers’ Index (PMI) rose to 53.3 from 52.8, ahead of the flash estimate of 52.7.

“The PMIs today were not robust but certainly better than expected,” Franulovich said.

The euro was last up 0.28% against the U.S. dollar at $1.1233. The single currency on Tuesday fell to its lowest levels in more than three weeks and neared $1.1174, which if broken would send the currency to its weakest levels since June 2017.

The Australian dollar jumped 0.65% against the greenback after Chinese and local data gave the currency a boost.

Activity in China’s services sector picked up to a 14-month high in March as demand improved at home and abroad, adding to signs that government stimulus policies are gradually kicking in.

Australian retailers enjoyed their best sales in February since late-2017 in a boon to economic growth in the first quarter, signaling surprising resilience in household consumption.

Sterling, gained 0.25% against the U.S. dollar after Prime Minister Theresa May announced talks with the opposition Labour party in a bid to break the Brexit deadlock that may lead to a softer departure deal with the EU.

The greenback was little changed by data on Wednesday that showed that U.S. private employers added 129,000 jobs in March, below economists’ expectations and the lowest since September 2017.

Investors are next focused on Friday’s government employment report for March for further indications on the strength of the U.S. labor market and wage inflation.

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