Investing.com - The euro weakened against the dollar on Wednesday after investors sold the single currency to await data on retail sales due out later Wednesday and a European Central Bank meeting due to take place Thursday.
Talk the ECB will buy sovereign debt has been building in recent weeks though investors sold to await more definitive hints or even formal announcements later this week.
In Asian trading on Wednesday, EUR/USD was trading down 0.27% at 1.2534, up from a low of 1.2523 and off from a high of 1.2535.
The pair was likely to find support at 1.2494, Friday's low, and resistance at 1.2611, Monday's high.
Markets are waiting for the European Central Bank to announce plans to buy sovereign debt issued by countries like Spain and Italy to ease the debt crisis, though the euro fell against the greenback as investors held off on more definitive trading strategies until that announcement comes.
Eurozone retail sales figures are due out later Wednesday, and investors stayed on the sidelines in liquid greenback positions until the numbers hit the wire and give markets a better glimpse into the health of the European economy and whether or not the ECB will move forward with plans to buy bonds.
Uncertainty concerning Europe offset weak manufacturing data out of the U.S.
In the U.S. earlier, the Institute for Supply Management said its purchasing managers' index fell by 0.2 points to 49.6 in August from a reading of 49.8 in July.
Analysts had expected the ISM index of purchasing managers to gain 0.2 points and hit 50.0.
The report added that new orders fell while inventories rose, indicating that sales are dropping, while the number of new workers hired fell to the lowest level since late 2009.
The numbers stoked already growing expectations that the Federal Reserve will stimulate the U.S. economy, likely with a third round of quantitative easing.
Under quantitative easing, the Fed buys assets such as Treasury holdings or mortgage-backed securities from banks, pumping the financial system full of liquidity to push down interest rates and encourage investing and hiring.
Such accommodative policies tend to weaken the dollar by design and send other currencies climbing.
However, the euro weakened on homegrown uncertainty and also due to weak manufacturing data released on Monday.
Revised data revealed the eurozone’s manufacturing sector contracted for the 13th consecutive month in August.
Global research firm Markit said the eurozone's manufacturing purchasing managers’ index hit 45.1, just short of analysts' calls for a 45.3 reading.
The reading came in well below the 50.0 mark that separates growth from contraction.
Markit also reported that Germany's manufacturing PMI hit 44.7, below analysts' calls for 45.1 reading.
The euro, meanwhile, was down against the pound and down against the yen, with EUR/GBP down 0.27% at 0.7897, and EUR/JPY trading down 0.21% at 98.36.
Talk the ECB will buy sovereign debt has been building in recent weeks though investors sold to await more definitive hints or even formal announcements later this week.
In Asian trading on Wednesday, EUR/USD was trading down 0.27% at 1.2534, up from a low of 1.2523 and off from a high of 1.2535.
The pair was likely to find support at 1.2494, Friday's low, and resistance at 1.2611, Monday's high.
Markets are waiting for the European Central Bank to announce plans to buy sovereign debt issued by countries like Spain and Italy to ease the debt crisis, though the euro fell against the greenback as investors held off on more definitive trading strategies until that announcement comes.
Eurozone retail sales figures are due out later Wednesday, and investors stayed on the sidelines in liquid greenback positions until the numbers hit the wire and give markets a better glimpse into the health of the European economy and whether or not the ECB will move forward with plans to buy bonds.
Uncertainty concerning Europe offset weak manufacturing data out of the U.S.
In the U.S. earlier, the Institute for Supply Management said its purchasing managers' index fell by 0.2 points to 49.6 in August from a reading of 49.8 in July.
Analysts had expected the ISM index of purchasing managers to gain 0.2 points and hit 50.0.
The report added that new orders fell while inventories rose, indicating that sales are dropping, while the number of new workers hired fell to the lowest level since late 2009.
The numbers stoked already growing expectations that the Federal Reserve will stimulate the U.S. economy, likely with a third round of quantitative easing.
Under quantitative easing, the Fed buys assets such as Treasury holdings or mortgage-backed securities from banks, pumping the financial system full of liquidity to push down interest rates and encourage investing and hiring.
Such accommodative policies tend to weaken the dollar by design and send other currencies climbing.
However, the euro weakened on homegrown uncertainty and also due to weak manufacturing data released on Monday.
Revised data revealed the eurozone’s manufacturing sector contracted for the 13th consecutive month in August.
Global research firm Markit said the eurozone's manufacturing purchasing managers’ index hit 45.1, just short of analysts' calls for a 45.3 reading.
The reading came in well below the 50.0 mark that separates growth from contraction.
Markit also reported that Germany's manufacturing PMI hit 44.7, below analysts' calls for 45.1 reading.
The euro, meanwhile, was down against the pound and down against the yen, with EUR/GBP down 0.27% at 0.7897, and EUR/JPY trading down 0.21% at 98.36.