Investing.com - The euro extended losses against the U.S. dollar on Tuesday, as the release of upbeat U.S. service sector data supported the idea that the Federal Reserve could still begin scaling back its stimulus program sooner than expected.
EUR/USD hit 1.3450 during U.S. morning trade, the session low; the pair subsequently consolidated at 1.3454, shedding 0.45%.
The pair was likely to find support at 1.3338, the low of September 18 and resistance at 1.3581, the high of November 1.
In a report, the Institute of Supply Management said its non-manufacturing purchasing manager's index rose to 55.4 in October from a reading of 54.4 in September.
Analysts had expected the index to decline to 54.0 last month.
But investors remained cautious as comments by Fed officials on Monday indicated that the bank is likely to keep its stimulus program in place for some time to come.
Federal Reserve Bank of Boston President Eric Rosengren said bank should keep its asset purchase program in place until there is "compelling evidence of a sustainable recovery making satisfactory progress toward full employment."
Meanwhile, the euro remained under broad selling pressure after data last week showing that euro zone annual inflation fell to a four year low in October raised concerns that the European Central Bank might cut rates in order to safeguard the economic recovery in the region.
While no policy change was expected from the ECB on Thursday many investors expected the bank to signal the possibility of further monetary policy easing at its meeting in December.
The European Commission cut its forecast for euro zone growth on Tuesday and said that unemployment in the region remains at unacceptably high levels.
The EC said it now expects economic growth of 1.1% in 2014 down from 1.2% and said the growth rate is expected to rise to 1.7% in 2015.
Earlier Tuesday, data showed that euro zone producer price inflation was down 0.9% from a year earlier in September, compared to expectations for a 0.7% decline.
The euro was also lower against the pound with EUR/GBP retreating 0.82%, to hit 0.8395.
Sterling strengthened broadly after data showed that activity in the U.K. services sector expanded at the fastest rate in 16 years in October.
Markit said the U.K. services purchasing managers index rose to 62.8 in October up from 60.3 in September, the sharpest rise in activity since May 1997. Economists had been expecting the index to tick down to 59.8.
EUR/USD hit 1.3450 during U.S. morning trade, the session low; the pair subsequently consolidated at 1.3454, shedding 0.45%.
The pair was likely to find support at 1.3338, the low of September 18 and resistance at 1.3581, the high of November 1.
In a report, the Institute of Supply Management said its non-manufacturing purchasing manager's index rose to 55.4 in October from a reading of 54.4 in September.
Analysts had expected the index to decline to 54.0 last month.
But investors remained cautious as comments by Fed officials on Monday indicated that the bank is likely to keep its stimulus program in place for some time to come.
Federal Reserve Bank of Boston President Eric Rosengren said bank should keep its asset purchase program in place until there is "compelling evidence of a sustainable recovery making satisfactory progress toward full employment."
Meanwhile, the euro remained under broad selling pressure after data last week showing that euro zone annual inflation fell to a four year low in October raised concerns that the European Central Bank might cut rates in order to safeguard the economic recovery in the region.
While no policy change was expected from the ECB on Thursday many investors expected the bank to signal the possibility of further monetary policy easing at its meeting in December.
The European Commission cut its forecast for euro zone growth on Tuesday and said that unemployment in the region remains at unacceptably high levels.
The EC said it now expects economic growth of 1.1% in 2014 down from 1.2% and said the growth rate is expected to rise to 1.7% in 2015.
Earlier Tuesday, data showed that euro zone producer price inflation was down 0.9% from a year earlier in September, compared to expectations for a 0.7% decline.
The euro was also lower against the pound with EUR/GBP retreating 0.82%, to hit 0.8395.
Sterling strengthened broadly after data showed that activity in the U.K. services sector expanded at the fastest rate in 16 years in October.
Markit said the U.K. services purchasing managers index rose to 62.8 in October up from 60.3 in September, the sharpest rise in activity since May 1997. Economists had been expecting the index to tick down to 59.8.