Investing.com - The euro firmed against the dollar on Monday after mixed U.S. data resuscitated expectations for the Federal Reserve to hold off on plans to taper its USD85 billion in monthly bond purchases until early 2014, while strong European data bolstered the single currency.
The Fed holds a policy two-day meeting that wraps up Wednesday, with markets unsure if the U.S. central bank will determine the economy has strengthened to the point to begin scaling back bond purchases, which weaken the dollar to spur recovery.
In U.S. trading on Monday, EUR/USD was up 0.14% at 1.3761, up from a session low of 1.3729 and off from a high of 1.3798.
The pair was likely to find support at 1.3695, the low from Dec. 9, and resistance at 1.3811, Wednesday's high.
London-based market research group Markit reported earlier that its preliminary U.S. manufacturing purchasing managers’ index declined to a seasonally adjusted 54.4 in December from a final reading of 54.7 in November.
Analysts were expecting the index to rise to 54.9 this month.
The Federal Reserve Bank of New York reported earlier that its Empire State manufacturing index came in at 0.98 in December compared to November's -2.21 reading, though analysts were expecting the index to rise to 4.75.
Separately, the Federal Reserve reported that U.S. industrial production advanced 1.1% in November after having edged up 0.1% in October, beating consensus forecasts for a 0.5% November reading.
The data encouraged investors to sell the greenback for profits until the Fed makes its policy stance clear on Wednesday.
Meanwhile in Europe, the euro saw support after Markit reported that the euro zone’s composite output index rose to 52.1 in December, from 51.7 in November, its largest jump since April 2011, indicating that European Central Bank policymakers will not need to step up stimulus measures.
New orders picked up to the highest level since mid-2011, fueling optimism that the recovery in the region will carry forward into the start of 2014.
Rising exports helped push the euro zone’s manufacturing purchasing managers’ index up to a 31-month high of 52.7 in December from November's final reading of 51.6, beating consensus forecasts for a 51.9 reading..
However, the service sector ticked down to a four-month low as domestic demand remained weak, coming in at 51.0 compared to forecasts for a 51.5 reading.
Germany's PMI came in at 54.2, beating market calls for a 53.0 reading.
A separate report showed that the euro zone’s trade surplus rose to EUR17.2 billion in October from EUR9.6 billion a year earlier and from EUR10.9 billion in September.
Imports fell by 1.2% in October from a month earlier, while exports rose 0.2%.
The single currency was up against the pound and down against the yen, with EUR/GBP trading up 0.07% at 0.8438 and EUR/JPY trading down 0.07% at 141.71.
On Tuesday, the ZEW Institute is to release its closely-watched report on German economic sentiment, while the euro zone is to publish data on consumer inflation.
The U.S. is to release data on consumer inflation and its current account balance.
The Fed holds a policy two-day meeting that wraps up Wednesday, with markets unsure if the U.S. central bank will determine the economy has strengthened to the point to begin scaling back bond purchases, which weaken the dollar to spur recovery.
In U.S. trading on Monday, EUR/USD was up 0.14% at 1.3761, up from a session low of 1.3729 and off from a high of 1.3798.
The pair was likely to find support at 1.3695, the low from Dec. 9, and resistance at 1.3811, Wednesday's high.
London-based market research group Markit reported earlier that its preliminary U.S. manufacturing purchasing managers’ index declined to a seasonally adjusted 54.4 in December from a final reading of 54.7 in November.
Analysts were expecting the index to rise to 54.9 this month.
The Federal Reserve Bank of New York reported earlier that its Empire State manufacturing index came in at 0.98 in December compared to November's -2.21 reading, though analysts were expecting the index to rise to 4.75.
Separately, the Federal Reserve reported that U.S. industrial production advanced 1.1% in November after having edged up 0.1% in October, beating consensus forecasts for a 0.5% November reading.
The data encouraged investors to sell the greenback for profits until the Fed makes its policy stance clear on Wednesday.
Meanwhile in Europe, the euro saw support after Markit reported that the euro zone’s composite output index rose to 52.1 in December, from 51.7 in November, its largest jump since April 2011, indicating that European Central Bank policymakers will not need to step up stimulus measures.
New orders picked up to the highest level since mid-2011, fueling optimism that the recovery in the region will carry forward into the start of 2014.
Rising exports helped push the euro zone’s manufacturing purchasing managers’ index up to a 31-month high of 52.7 in December from November's final reading of 51.6, beating consensus forecasts for a 51.9 reading..
However, the service sector ticked down to a four-month low as domestic demand remained weak, coming in at 51.0 compared to forecasts for a 51.5 reading.
Germany's PMI came in at 54.2, beating market calls for a 53.0 reading.
A separate report showed that the euro zone’s trade surplus rose to EUR17.2 billion in October from EUR9.6 billion a year earlier and from EUR10.9 billion in September.
Imports fell by 1.2% in October from a month earlier, while exports rose 0.2%.
The single currency was up against the pound and down against the yen, with EUR/GBP trading up 0.07% at 0.8438 and EUR/JPY trading down 0.07% at 141.71.
On Tuesday, the ZEW Institute is to release its closely-watched report on German economic sentiment, while the euro zone is to publish data on consumer inflation.
The U.S. is to release data on consumer inflation and its current account balance.