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Forex - EUR/USD gains on tepid U.S. factory data

Published 12/01/2014, 12:38 PM
Updated 12/01/2014, 12:39 PM
Euro firms as soft U.S. factory gauge cools dollar rally
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Investing.com - The euro firmed against the dollar on Monday after industry data revealed that U.S. manufacturing activity grew a little less than expected in November.

In U.S. trading, EUR/USD was up 0.28% at 1.2487, up from a session low of 1.2420 and off a high of 1.2507.

The pair was likely to find support at 1.2357, last Monday's low, and resistance at 1.2532, last Wednesday's high.

U.K.-based Markit Economics reported earlier that U.S. manufacturing activity in November expanded at its slowest pace since January, as new export orders fell.

The Markit U.S. manufacturing purchasing managers’ index ticked down to 54.8 in November from 55.9 in October. Economists had forecast a decline to 55.0.

Similar data allowed for the dollar to slide.

The Institute of Supply Management reported earlier that its manufacturing PMI dipped to 58.7 from 59.0 in October, though still better than expectations of 57.9.

Meanwhile in Europe, Markit Economics reported that factory activity in the euro zone slowed to a near standstill last month.

The euro zone’s manufacturing PMI slowed to 50.1 from a preliminary reading of 50.4 last month, just barely above the 50 level separating growth from contraction.

Germany’s manufacturing PMI entered contraction territory for the first time in 17 months, falling to 49.5, as new orders fell at the fastest rate in nearly two years.

The French manufacturing PMI remained in contraction territory at 48.4, while Italy’s factory PMI came in at 49.0.

The reports came after data on Friday showed that the annual rate of euro area inflation slowed to a five-year low of 0.3% in November, down from 0.4% in October.

Elsewhere, the euro was down against the pound, with EUR/GBP down 0.33% at 0.7934, and down against the yen, with EUR/JPY down 0.04% at 147.62.

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