Investing.com - The euro hit fresh nine-month lows against the U.S. dollar on Tuesday, as upbeat U.S. service sector data boosted the greenback, while a series of lackluster service sector activity reports released earlier from across the euro zone continued to weigh on the single currency.
EUR/USD hit 1.3369 during U.S. morning trade, the pair's lowest since November 2013; the pair subsequently consolidated at 1.3365, declining 0.42%.
The pair was likely to find support at 1.3298 and resistance at 1.3431, Monday's high.
The Institute of Supply Management said its non-manufacturing purchasing manager's index rose to a three-year high of 58.7 last month from a reading of 56.0 in June. Analysts had expected the index to inch up to 56.3 in July.
The single currency weakened earlier, after a report showed that service sector activity in Italy grew at a slower pace than expected in July, one month after hitting the highest level since November 2010.
Italy’s services purchasing managers index slowed to 52.8 in July from 53.9 in June. Economists had expected a reading of 54.0.
Service sector activity in German and Spain grew last month, while the expansion in the French service sector remained marginal.
The euro zone’s services PMI came in at 54.2, up from 52.2 in June, but slowing slightly from a preliminary reading of 54.4.
The data added to the view that the recovery in the euro zone is losing momentum as investors looked ahead to the outcome of the European Central Bank’s monetary policy meeting on Thursday.
A report late last week showing that the annual rate of inflation in the euro area slowed to 0.4% in July from 0.5% in June added to concerns over growing deflationary pressures in the region.
A separate report on Tuesday showed that euro zone retail sales rose by 0.4% from a month earlier in June, in line with forecasts.
The euro was also lower against the pound, with EUR/GBP shedding 0.36% to 0.7931.
In the U.K., a report showed that the services sector expanded at the fastest rate in eight months in July.
The robust data added to the view that the deepening economic recovery in the U.K. will prompt the Bank of England to raise interest rates before the end of 2014.