Investing.com - The broadly weaker euro remained lower against the U.S. dollar on Wednesday as concerns over the debt crisis in the euro zone weighed but the single currency found support following data showing that U.S. service sector activity declined in March.
EUR/USD hit 1.3108 during U.S. morning trade, the pair’s lowest since March 16; the pair subsequently consolidated at 1.3140, shedding 0.70%.
The pair was likely to find support at 1.3048, the low of March 16 and resistance at 1.3238, the session high.
The Institute of Supply Management said its non-manufacturing purchasing manager's index declined by 1.3 points to 56.0 last month from a reading of 57.3 in February.
Analysts had expected the index to decline by 0.3 points to 57.0 in March.
Earlier in the day, payrolls processing firm ADP reported that the U.S. private sector added 209,000 jobs last month, outstripping expectations for an increase of 200,000.
February’s figure was revised up to a gain of 230,000 from a previously reported increase of 216,000.
The reports came one day after the minutes of the Fed’s March meeting showed that policymakers will refrain from launching a third round of quantitative easing unless the rate of U.S. growth falters or inflation drops below the central bank’s 2% targeted rate.
Sentiment on the euro was hit by fresh concerns over the debt crisis in the euro zone, after a poorly received auction of Spanish government debt earlier saw the country’s borrowing costs rise.
Spain’s Treasury auctioned EUR2.59 billon of government bonds, short of the maximum targeted amount of EUR3.5 billion, in the country’s first debt auction since last week’s austerity budget. Following the auction, the yield on Spanish 10-year bonds climbed to 5.7%, up from 5.5% before the sale.
On Tuesday, Spain’s government announced that the country’s public debt will rise to a record 79.8% of gross domestic product this year.
Meanwhile, concerns over the outlook for growth in the euro zone mounted following a flurry of weak economic data.
Official data confirmed that the euro zone service sector contracted for the sixth time in seven months in March, increasing the likelihood that the economy has entered a technical recession.
The final euro zone services purchasing managers’ index was revised up to 49.2 in March, from a preliminary estimate of 48.7, but remained below the 50 level that separates contraction from expansion.
A separate report showed that euro zone retail sales fell by 0.1% in February, against expectations for a 0.1% increase and were 2.1% lower year-on-year.
Elsewhere, official data showed that German factory orders rose 0.3% in February, below expectations for a 1.2% increase, renewing concerns over the economic outlook for the bloc’s largest economy.
The euro was sharply lower against the yen, with EUR/JPY tumbling 1.29% to hit 108.15 and was also weaker against the pound, with EUR/GBP shedding 0.48% to hit 0.8676.
Also Wednesday, the European Central Bank left its benchmark interest unchanged at 1.00%, in a widely expected decision.
Following the decision, ECB President Mario Draghi said that growth has “stabilized at low levels” and that a moderate recovery is expected in course of the year.
EUR/USD hit 1.3108 during U.S. morning trade, the pair’s lowest since March 16; the pair subsequently consolidated at 1.3140, shedding 0.70%.
The pair was likely to find support at 1.3048, the low of March 16 and resistance at 1.3238, the session high.
The Institute of Supply Management said its non-manufacturing purchasing manager's index declined by 1.3 points to 56.0 last month from a reading of 57.3 in February.
Analysts had expected the index to decline by 0.3 points to 57.0 in March.
Earlier in the day, payrolls processing firm ADP reported that the U.S. private sector added 209,000 jobs last month, outstripping expectations for an increase of 200,000.
February’s figure was revised up to a gain of 230,000 from a previously reported increase of 216,000.
The reports came one day after the minutes of the Fed’s March meeting showed that policymakers will refrain from launching a third round of quantitative easing unless the rate of U.S. growth falters or inflation drops below the central bank’s 2% targeted rate.
Sentiment on the euro was hit by fresh concerns over the debt crisis in the euro zone, after a poorly received auction of Spanish government debt earlier saw the country’s borrowing costs rise.
Spain’s Treasury auctioned EUR2.59 billon of government bonds, short of the maximum targeted amount of EUR3.5 billion, in the country’s first debt auction since last week’s austerity budget. Following the auction, the yield on Spanish 10-year bonds climbed to 5.7%, up from 5.5% before the sale.
On Tuesday, Spain’s government announced that the country’s public debt will rise to a record 79.8% of gross domestic product this year.
Meanwhile, concerns over the outlook for growth in the euro zone mounted following a flurry of weak economic data.
Official data confirmed that the euro zone service sector contracted for the sixth time in seven months in March, increasing the likelihood that the economy has entered a technical recession.
The final euro zone services purchasing managers’ index was revised up to 49.2 in March, from a preliminary estimate of 48.7, but remained below the 50 level that separates contraction from expansion.
A separate report showed that euro zone retail sales fell by 0.1% in February, against expectations for a 0.1% increase and were 2.1% lower year-on-year.
Elsewhere, official data showed that German factory orders rose 0.3% in February, below expectations for a 1.2% increase, renewing concerns over the economic outlook for the bloc’s largest economy.
The euro was sharply lower against the yen, with EUR/JPY tumbling 1.29% to hit 108.15 and was also weaker against the pound, with EUR/GBP shedding 0.48% to hit 0.8676.
Also Wednesday, the European Central Bank left its benchmark interest unchanged at 1.00%, in a widely expected decision.
Following the decision, ECB President Mario Draghi said that growth has “stabilized at low levels” and that a moderate recovery is expected in course of the year.