Forex - EUR/USD down on strong U.S. data

Investing.com - The euro traded lower against the U.S. dollar Thursday, as the release of stronger-than-expected U.S. data on employment, manufacturing and consumer confidence lifted sentiment for the greenback

EUR/USD hit 1.2982 during U.S. trade, the session high; the pair subsequently consolidated at 1.2945, down 0.12%.

The pair was likely to find support at 1.2885, Tuesday’s low and resistance at 1.3019, Wednesday’s high.

The euro came off session lows after the U.S. Department of Labor said the number of individuals filing for initial jobless benefits fell to 363,000 last week from 372,000 the previous week, compared to expectations for a decline to 370,000.

The previous week’s figure was revised up to 372,000 from a previously reported 369,000.

The data came on the heels of a report showing that U.S. private sector employment increased more-than-expected in October.

Payroll processing firm ADP said the U.S. private sector added 158,000 jobs this month, surpassing expectations for an increase of 135,000. 

The previous month’s figure was revised down to a gain of 88,200 from a previously reported increase of 162,000.

Also Thursday, the Institute for Supply Management said its index of U.S. purchasing managers rose to a five-month high of 51.7 in October from a reading of 51.5 in September. 

A separate report showed that U.S. consumer confidence rose to the highest level since February 2008 in October.

The euro’s gains were limited amid ongoing uncertainty over when Spain may request a bailout and whether Greece will secure the next tranche of its bailout funding.

Investors also remained cautious ahead of U.S. data on nonfarm payrolls on Friday and the U.S. presidential elections next week.

The euro was lower against the pound, with EUR/GBP falling 0.19% to 0.8020 but was higher against the yen, with EUR/JPY rising 0.30% to 103.68.

Earlier Thursday, data showed that the U.K. manufacturing purchasing managers’ index fell to 47.5 in October from a reading of 48.4 in September, compared to expectations for a dip to 48.1.

Demand for the pound continued to remain underpinned after government data last week showed that the U.K. economy emerged from recession in the third quarter, prompting market participants to trim back expectations for another round of easing by the Bank of England.