Forex - EUR/USD dips on weaker output data

Published 02/22/2012, 07:57 PM
Updated 02/22/2012, 07:59 PM
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Investing.com - The euro was slightly lower against the dollar on Thursday, dipping after manufacturing data out of both Germany and the eurozone as a whole came in weaker than expected, stoking concerns that the European economy may be cooling.

Weak U.S. housing data gave the euro some support, however.

In Asian trading on Thursday, EUR/USD hit 1.3247, down 0.02%, gaining from a session low of 1.3244 and off from a high of 1.3256.

The pair was likely to test support at 1.3187, Tuesday's low, and resistance at 1.3293, Tuesday's high.

London-based Markit Economics reported its composite purchasing manager index for both service and manufacturing sectors across the eurozone dropped to 49.7 in February from 50.4 in January.

German numbers disappointed as well, and both figures primed fears that if both service and manufacturing sectors are producing less, clouds may be building on Europe's horizon.

Meanwhile, in Greece, Fitch Ratings downgraded the country's debt ratings to C from CCC after the country got the green light from European finance officials to restructure debts with private creditors.

In the neighboring U.K., minutes from the Bank of England's Monetary Policy Committee revealed some members were in favor of fresh quantitative easing measures, which gave the euro support against the pound.

Across the Atlantic in the U.S., the National Association of Realtors reported that existing home sales rose by 4.3% to a seasonally adjusted 4.57 million units in January, below expectations for a gain of 6.2% to 4.67 million units.

The euro was steady against the pound and down against the yen, with EUR/GBP gaining 0.01% to 0.8456 and EUR/JPY down 0.11% at 106.27.

Later Thursday, Germany is to publish an Ifo report on business climate, a key gauge of economic health.

Also in Europe, the U.K. will release industry data on mortgage approvals, an important indicator of housing market demand as well as data on industrial order expectations, a key gauge of economic health.

The U.S. will publish government data on initial jobless claims, an key signal of overall economic health, as well as numbers on crude and gasoline inventories.

Meanwhile, finance ministers and central bankers are to meet throughout the day for a G20 meeting in Mexico.





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