Investing.com - The euro erased losses against the U.S. dollar on Thursday, pulling back from a four-month low after official data showed that manufacturing activity in the Philadelphia-region contracted for the first time in eight months in May, adding to concerns over the pace of the U.S. economic recovery.
EUR/USD pulled away from 1.2666, the pair’s lowest since January 17, to hit 1.2619 during U.S. morning trade, inching up 0.03%.
The pair was likely to find support at 1.2666, the session low and resistance at 1.2758, Wednesday’s high.
The Federal Reserve Bank of Philadelphia said that its manufacturing index dropped by 14.3 points to minus 5.8 in May from April’s reading of 8.5.
Analysts had expected the index to rise by 1.5 points to 10.0 in May.
On Wednesday, the minutes of the Federal Reserve’s last meeting indicated that several policymakers remain open to further efforts to stimulate the U.S. economy if growth falters or if the risks to the economy increase.
A separate report showed that the number of people who filed for unemployment assistance in the U.S. last week held steady at a seasonally adjusted 370,000, confounding expectations for a decline of 5,000 to 365,000.
The euro fell to a four-month trough against the greenback earlier amid speculation that rating’s agency Moody’s was preparing to announce widespread downgrades on Spain’s troubled banking sector.
Spain successfully auctioned EUR2.5 billion of government bonds on Thursday, but the country’s borrowing costs rose sharply, pressured higher by worries over the health of the country’s banking sector.
Meanwhile, fears over the implications of a Greek exit from the euro zone continued as the country prepared for fresh elections next month, which could see anti-austerity parties take power.
The euro was higher against the broadly weaker pound, with EUR/GBP adding 0.49% to hit 0.8030 but was trading at a more than three-month low against the yen, with EUR/JPY down 0.67% to hit 101.45.
Also Thursday, the Confidence Board's index of leading U.S. economic indicators fell in April down for the first time in seven months.
EUR/USD pulled away from 1.2666, the pair’s lowest since January 17, to hit 1.2619 during U.S. morning trade, inching up 0.03%.
The pair was likely to find support at 1.2666, the session low and resistance at 1.2758, Wednesday’s high.
The Federal Reserve Bank of Philadelphia said that its manufacturing index dropped by 14.3 points to minus 5.8 in May from April’s reading of 8.5.
Analysts had expected the index to rise by 1.5 points to 10.0 in May.
On Wednesday, the minutes of the Federal Reserve’s last meeting indicated that several policymakers remain open to further efforts to stimulate the U.S. economy if growth falters or if the risks to the economy increase.
A separate report showed that the number of people who filed for unemployment assistance in the U.S. last week held steady at a seasonally adjusted 370,000, confounding expectations for a decline of 5,000 to 365,000.
The euro fell to a four-month trough against the greenback earlier amid speculation that rating’s agency Moody’s was preparing to announce widespread downgrades on Spain’s troubled banking sector.
Spain successfully auctioned EUR2.5 billion of government bonds on Thursday, but the country’s borrowing costs rose sharply, pressured higher by worries over the health of the country’s banking sector.
Meanwhile, fears over the implications of a Greek exit from the euro zone continued as the country prepared for fresh elections next month, which could see anti-austerity parties take power.
The euro was higher against the broadly weaker pound, with EUR/GBP adding 0.49% to hit 0.8030 but was trading at a more than three-month low against the yen, with EUR/JPY down 0.67% to hit 101.45.
Also Thursday, the Confidence Board's index of leading U.S. economic indicators fell in April down for the first time in seven months.