Investing.com - A flurry of solid U.S. economic indicators sent the dollar firming against the euro on Thursday, a day after the Federal Reserve revealed monetary authorities are moving closer to normalizing ultra-loose policies that have softened the greenback since the 2008 financial crisis.
In U.S. trading, EUR/USD was down 0.20% at 1.3658, up from a session low of 1.3647 and off a high of 1.3688.
The pair was likely to find support at 1.3636, Wednesday's low, and resistance at 1.3723, Wednesday's high.
The National Association of Realtors reported earlier that U.S. existing home sales increased 1.3% in April to an annual rate of 4.65 million units.
Analysts were expecting existing home sales to rise 2.2% to 4.68 million last month, however, April's increase indicated that the housing market continues to improve.
A separate report showed that U.S. manufacturing activity expanded at a faster rate than expected this month. London-based Markit Economics reported earlier that its preliminary U.S. manufacturing purchasing managers' index rose to 56.2 from a final reading of 55.4 in April, beating expectations of 55.5.
The data came after the Labor Department reported that the number of individuals filing for initial jobless benefits last week increased by 28,000 to 326,000 from the previous week’s revised total of 298,000. Analysts had expected jobless claims to rise by 12,000 to 310,000, though markets shrugged off the data.
On Wednesday, the Federal Reserve released the minutes of its April policy meeting, which revealed the U.S. central bank plans to continue tapering its monthly bond-buying program and rely on other tools to normalize monetary policy, though actual rate hikes won't come for a considerable amount of time.
Since the 2008 financial crisis, the Fed has snapped up trillions of dollars in bonds from banks to spur recovery by suppressing long-term interest rates, weakening the dollar in the process.
Elsewhere a preliminary reading of China’s HSBC manufacturing index rose to a five-month high of 49.7, beating expectations for a 48.1 reading, though the figure still remained below the 50 mark separating contraction from expansion
Meanwhile in Europe, data released earlier revealed that manufacturing activity in the region expanded at the slowest rate in six months in May, but the region’s service sector expanded at its fastest rate in almost three years.
The euro zone flash manufacturing purchasing managers’ index slid to 52.5 this month from 53.4 in April, missing expectations for a 53.2 reading, according to Markit Economics.
The bloc’s services PMI rose to a 35-month high of 53.5 up from 53.1 in April. Analysts had expected the index to tick down to 53.0.
The report said output across the sector increased for an eleventh successive month, while growth in new orders hit a three-year high and employment rose at fastest rate since September 2011.
The euro zone PMI data echoed that of Germany, with growth in the German manufacturing sector slowing to a six-month low and activity in the services sector growing at its fastest rate in nearly three years.
Germany’s manufacturing PMI slid to 52.9 from 54.1 in April, while the services PMI improved to 56.4 from 54.7 last month.
The French private sector fell back into contraction territory this month, with its manufacturing PMI down to a three month low of 49.3 from 51.2 in April and its services PMI falling to 49.2 from 50.4 last month.
The common currency remained under pressure amid heightened expectations for monetary easing by the ECB at its next meeting in June, in order to stop inflation from falling too low.
The euro was up against the pound, with EUR/GBP up 0.03% to 0.8101, and up against the yen, with EUR/JPY up 0.10% at 138.90.
On Friday in the euro zone, the Ifo Institute is to publish data on German business climate, while the U.S. is to round up the week with data on new homes sales.