Forex - EUR/USD flat as weak U.S. data counteracts European debt fears

Investing.com - The euro traded flat against the U.S. dollar Thursday as weaker than expected U.S. economic data weighed on the greenback despite continued euro zone debt worries.

EUR/USD hit a high of 1.3166 and a low of 1.3070 prior to consolidating at 1.3120 up 0.02%

The pair was likely to find support at 1.3003, the low of March 15 and resistance at 1.3171, Tuesday’s high.

Knocking the greenback lower, government data indicated that manufacturing activity in the Philadelphia-region expanded at a slower rate than expected in April, while an industry report showed that U.S. existing home sales declined unexpectedly last month.

The data arrived after a government report showing that the number of people who filed for unemployment assistance in the U.S. last week fell less-than-expected, while the previous week’s figure was revised higher.

The Department of Labor said the number of individuals filing for initial jobless benefits in the week ending April 14 fell by 2,000 to a seasonally adjusted 386,000, disappointing expectations for a decline of 18,000 to 370,000.

The previous week’s figure was revised up to 388,000 from 380,000
The single currency fell to the session low against the U.S. dollar earlier, as concerns over Spain’s financial problems weighed, despite initial relief following an auction of Spanish government bonds.

Spain obtained slightly more than the full targeted amount of EUR2.5 billion, while the yield on the country’s 10-year bonds was higher but remained below the 6% level.

Spain auctioned EUR1.11 billion of two-year bonds at an average yield of 3.46%, up from 2.06% at a similar auction last month and EUR1.42 billion of 10-year bonds at an average yield of 5.74%, up from 5.33% from a similar auction in March.

The increase in 10-year bond yields reflected concerns that that Spain’s government may struggle to reduce one of the largest deficits in the euro zone in the face of a looming recession.

The euro was lower against the pound, with EUR/GBP giving back 0.21% to hit 0.8173, but moved higher against the yen, with EUR/JPY adding 0.36% to hit 107.01.