Forex - EUR/USD flat on euro zone fears and weak U.S. data

Investing.com - The euro traded flat against the U.S. dollar Thursday, as euro zone economic fears depressed the single currency, while disappointing U.S. manufacturing data cast doubts over the strength of the country’s economic recovery

EUR/USD bounced from 1.2516, the pair’s lowest since July 6, 2010, to hit 1.2576 during U.S. afternoon trade, easing 0.05% lower on the session

The pair was likely to find support at 1.2516 and resistance at 1.2598, the session high.

The euro found support against the greenback after the Commerce Department reported U.S. core durable goods orders gave back a seasonally adjusted 0.6% in April, defying analyst’s expectations for a 0.9% gain and lower for the second consecutive month.

Total durable goods orders, which include transportation items, inched by a seasonally adjusted 0.2% in April, below expectations for a 0.5% gain.

However, demand for the safe haven greenback remained supported after dismal euro zone economic data earlier in the day sparked fresh concerns over the impact of the crisis on the region’s troubled economy.

The euro was knocked lower as a report indicated that manufacturing activity in the euro area contracted at the fastest pace since June 2009 in May, while service sector activity shrank at the steepest pace in seven months.

Germany manufacturing activity slowed to the lowest level in almost three years in May, sparking fresh fears over the impact of the euro zone debt crisis on the region’s largest economy.

A separate report showed that the German Ifo business climate index deteriorated significantly more-than-expected in May, pressured lower by uncertainty in the euro zone.

Market participants also remained risk adverse after Wednesday’s summit of European Union leaders made little signs of progress in tackling the debt crisis in the region.

Elsewhere, the euro slipped lower against the pound and the yen, with EUR/GBP dipping 0.04% to hit 0.8014 and EUR/JPY easing down 0.11% striking 99.89.

In other news Thursday, the U.S. Department of Labor said the number of people who filed for unemployment assistance in the U.S. last week fell to a seasonally adjusted 370,000, meeting expectations.