Investing.com -- EUR/USD wavered on a choppy day of trading after falling to fresh seven-month lows, as investors digested further signals of divergence between central banks in the U.S. and the euro zone.
The currency pair traded in a broad range between 1.0551 and 1.0637, before settling at 1.0617, down 0.0011 or 0.09% on the session. The euro has closed lower against the dollar in five of the last six sessions. More broadly, the euro has lost 3.5% against its American counterpart over the last month and more than 12% for the calendar year. It has been more than 12 years since the pair last traded at parity.
EUR/USD likely gained support at 1.0456, the low from March 16 and was met with resistance at 1.1013, the high from November 3.
The euro slid to its lowest level against the dollar since mid-April on Wednesday morning when the ADP Research Institute said in its National Employment Report that U.S. private employers added 217,000 jobs in November, up from 182,000 a month earlier. Analysts expected to see gains of 183,000 in the November report.
The unexpected surge provides a strong harbinger for Friday's critical U.S. jobs report, the last before the Federal Open Market Committee holds a two day meeting on Dec. 15-16. Hawkish arguments for December lift-off gained momentum early last month after a robust employment report provided signals that the economy could handle the first upward move in rates in nearly a decade.
In the October report, the U.S. Department of Labor said nonfarm payrolls jumped by 271,000 while the unemployment rate ticked by 0.1 to 5.0%. Analysts expect the unemployment rate to hold steady at 5.0% and expect to see solid job gains of 190,000. In terms of average hourly wages, analysts expect an increase of 0.1 to 0.3%, following a major jump of 0.4% in October. Wages have been sluggish for more than a year.
Federal Reserve chair Janet Yellen said Wednesday she is looking forward to the day when the U.S. central bank decides to raise short-term interest rates, after remaining at near-zero levels since the depths of the Financial Crisis. In doing so, Yellen said, the symbolic moment "will be a testament" to how much the economy has recovered from the Great Recession. In an appearance before the Economic Club of Washington, Yellen also noted that a flurry of economic and financial data since the Fed last met in October has been in line with its expectations for improvements in the labor market.
The euro pared some losses, though, after Yellen reiterated that the Fed will be cautious in raising rates gradually following lift-off. The Fed chair also emphasized that the U.S. central bank will not be mechanical in its approach by implementing a calendar-based plan for normalization, as some of her predecessors had in previous cycles.
Investors now turn their attention to Thursday's key European Central Bank meeting, where the Governing Council is widely expected to ramp up a comprehensive €1.1 trillion bond-buying program. The ECB could also cut its benchmark refinancing rate from a record-low of 0.05% and reduce its deposit rate, which is already in negative territory at -0.20%.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, surged to a yearly-high of 100.41, before falling back to 100.00, up 0.19% on the session.