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EUR/USD falls as upbeat jobs, factory data spark dollar demand

Published 04/02/2014, 12:18 PM
Updated 04/02/2014, 12:20 PM
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Investing.com - The dollar jumped up against the euro on Wednesday after investors applauded upbeat reports on private-sector hiring and factory orders in the U.S.

In U.S. trading, EUR/USD was down 0.22% at 1.3763, up from a session low of 1.3753 and off a high of 1.3820.

The pair was likely to find support at 1.3705, Friday's low, and resistance at 1.3876, the high from March 24.

Payroll processing firm ADP reported earlier that the U.S. private sector added 191,000 jobs in March, just shy of expectations for a 195,000 reading.

February’s figure was revised up to a gain of 178,000 from a previously reported increase of 139,000, and the overall report bolstered the dollar by fueling hopes Friday's official nonfarm payrolls data will come in solid.

Separately, the Commerce Department said U.S. factory orders jumped 1.6% in February, the biggest increase since September, ahead of forecasts for a 1.2% rise.

The data strengthened the greenback by keeping expectations on track for the Federal Reserve to continue winding monetary stimulus programs this year.

The euro, meanwhile, continued to come under pressure on expectations for the European Central Bank to take policy steps to prop up the economy.

On Monday data revealed the euro zone's annual inflation rate slowed to 0.5% in March, the lowest since November 2009.

Data released earlier showing that the euro zone's producer prices index contracted 0.2% in February from January, worse than market calls for a -0.1% reading.

On year, producer prices contracted 1.7%, outpacing market calls for a 1.6% contraction.

Also in Europe, the euro zone's gross domestic product growth rate as adjusted to 0.2% in the final quarter of 2013, down from a previous 0.3% estimate, according Eurostat.

The euro was down against the pound, with EUR/GBP down 0.27% to 0.8272, and down against the yen, with EUR/JPY down 0.13% at 142.81.

On Thursday, the euro zone is to release data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. Spain and Italy are to publish data on service sector activity.

Later in the day, the European Central Bank is to announce its benchmark interest rate. The announcement is to be followed by a press conference with President Mario Draghi.

The U.S. is to publish data on the trade balance and its weekly report on initial jobless claims.

Meanwhile, the Institute for Supply Management is to publish a report service-sector activity.

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