Investing.com - The dollar moved steady to lower against the euro on Wednesday as investors weighed the bearish possibility of a U.S. attack on Syria as well as the bullish likelihood that the Federal Reserve will begin tapering its bond-buying program this month.
In U.S. trading on Wednesday, EUR/USD was up 0.02% at 1.3174, up from a session low of 1.3157 and off from a high of 1.3187.
The pair was likely to find support at 1.3139, Tuesday's low, and resistance at 1.3227, Monday's high.
The U.S. Commerce Department reported earlier that the U.S. trade deficit widened more than expected in July, hitting USD39.1 billion from a downwardly revised USD34.5 billion deficit in June, mainly due to improving imports and soft exports.
Analysts were expecting the trade deficit to widen to USD38.7 billion in July.
Investors remained eager for the release of Friday’s U.S. nonfarm payrolls report, which is seen as a tipping point over whether the Fed will begin tapering asset purchases this month.
Many investors expect the Federal Reserve to announce plans to unwind its USD85 billion monthly bond-buying program at its Sept. 17-18 policy meeting.
Monthly asset purchases weaken the dollar to spur recovery as long as they remain in effect, and talk of their dismantling can bolster the greenback.
Elsewhere, uncertainty over U.S. plans to launch military strikes against Syria softened the dollar somewhat.
U.S. President Barack Obama has asked for a Congressional nod to begin limited strikes against Syria for its alleged use of chemical weapons, though he said earlier Wednesday that he does not need approval to strike, which softened dollar demand.
Meanwhile in Europe, data released earlier showed that the final reading of Germany’s services purchasing managers' index came in at 52.8 in August, up from a preliminary reading of 52.4.
Analysts were expecting the figure to remain unchanged at 52.4.
The euro zone’s services PMI dipped to 50.7, from an initial estimate for 51.0, disappointing consensus forecasts calling for an unchanged reading of 51.0.
Meanwhile, Eurostat, the statistical office of the European Union, reported that the euro area's gross domestic product rose by 0.3% during the second quarter of 2013, in line with expectations.
The euro saw headwinds, however, after Eurostat reported that the euro area's retail sales rose 0.1% in July from June, better than June's 0.7% contraction but short of market calls for a 0.4% rise.
The euro was down against the pound and up against the yen, with EUR/GBP trading down 0.20% at 0.8447 and EUR/JPY trading up 0.15% at 131.36.
The Markit U.K. services purchasing managers’ index rose to 60.5 in August, the highest since December 2006, from 60.2 in July. Economists were calling for a decline to 59.0.
The report said new business grew for the eighth successive month and the latest increase was the largest seen in more than 16 years, adding to recent indications that the U.K. economic recovery is gaining steam.
On Thursday, Germany is to publish government data on factory orders, a leading indicator of production.
The ECB is to announce its benchmark interest rate. The announcement is to be followed by what will be a closely watched press conference with President Mario Draghi.
The U.S. is to release the ADP nonfarm payrolls report on private-sector job creation, as well as the weekly government report on initial jobless claims.
In U.S. trading on Wednesday, EUR/USD was up 0.02% at 1.3174, up from a session low of 1.3157 and off from a high of 1.3187.
The pair was likely to find support at 1.3139, Tuesday's low, and resistance at 1.3227, Monday's high.
The U.S. Commerce Department reported earlier that the U.S. trade deficit widened more than expected in July, hitting USD39.1 billion from a downwardly revised USD34.5 billion deficit in June, mainly due to improving imports and soft exports.
Analysts were expecting the trade deficit to widen to USD38.7 billion in July.
Investors remained eager for the release of Friday’s U.S. nonfarm payrolls report, which is seen as a tipping point over whether the Fed will begin tapering asset purchases this month.
Many investors expect the Federal Reserve to announce plans to unwind its USD85 billion monthly bond-buying program at its Sept. 17-18 policy meeting.
Monthly asset purchases weaken the dollar to spur recovery as long as they remain in effect, and talk of their dismantling can bolster the greenback.
Elsewhere, uncertainty over U.S. plans to launch military strikes against Syria softened the dollar somewhat.
U.S. President Barack Obama has asked for a Congressional nod to begin limited strikes against Syria for its alleged use of chemical weapons, though he said earlier Wednesday that he does not need approval to strike, which softened dollar demand.
Meanwhile in Europe, data released earlier showed that the final reading of Germany’s services purchasing managers' index came in at 52.8 in August, up from a preliminary reading of 52.4.
Analysts were expecting the figure to remain unchanged at 52.4.
The euro zone’s services PMI dipped to 50.7, from an initial estimate for 51.0, disappointing consensus forecasts calling for an unchanged reading of 51.0.
Meanwhile, Eurostat, the statistical office of the European Union, reported that the euro area's gross domestic product rose by 0.3% during the second quarter of 2013, in line with expectations.
The euro saw headwinds, however, after Eurostat reported that the euro area's retail sales rose 0.1% in July from June, better than June's 0.7% contraction but short of market calls for a 0.4% rise.
The euro was down against the pound and up against the yen, with EUR/GBP trading down 0.20% at 0.8447 and EUR/JPY trading up 0.15% at 131.36.
The Markit U.K. services purchasing managers’ index rose to 60.5 in August, the highest since December 2006, from 60.2 in July. Economists were calling for a decline to 59.0.
The report said new business grew for the eighth successive month and the latest increase was the largest seen in more than 16 years, adding to recent indications that the U.K. economic recovery is gaining steam.
On Thursday, Germany is to publish government data on factory orders, a leading indicator of production.
The ECB is to announce its benchmark interest rate. The announcement is to be followed by what will be a closely watched press conference with President Mario Draghi.
The U.S. is to release the ADP nonfarm payrolls report on private-sector job creation, as well as the weekly government report on initial jobless claims.