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Forex - EUR/USD hovers near 6-week lows in risk-off trade

Published 05/15/2013, 10:11 AM
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Investing.com - The euro continued to hover near six-week lows against the U.S. dollar on Wednesday, as a string of weak economic reports from the U.S. and the euro zone weighed on demand for risk-related assets.

EUR/USD hit 1.2844 during U.S. morning trade, the pair's lowest since April 4; the pair subsequently consolidated at 1.2867, shedding 0.41%.

The pair was likely to find support at 1.2747, the low of April 4 and resistance at 1.3029, the session high.

Official data showed that U.S. industrial production fell more-than-expected in April, slipping 0.5% after a 0.3% rise the previous month. Analysts had expected industrial production to decline 0.2% last month.

The data came after the U.S. Department of Labor said producer price inflation fell 0.7% in April, more than the expected 0.6% fall, after a 0.6% decline the previous month.

Core producer price inflation, which excludes good and energy, rose 0.1% last month, in line with expectations, after a 0.2% increase the previous month.

Separately, the Empire State manufacturing index slid to minus 1.4 in May, from a reading of 3.1, disappointing expectations for a rise to 4.0.

In the euro zone, preliminary data showed that gross domestic product fell 0.2% in the first quarter, more than the expected 0.1% fall, after a 0.6% decline in the previous quarter.

The data came after a separate report showed that Germany's GDP rose less-than-expected in the first quarter, adding 0.1% after a 0.7% decline in the previous quarter. Analysts had expected the GDP to rise 0.3% in the first quarter.

Year-on-year, Germany's GDP contracted by 1.7%, disappointing expectations for a 0.2% a rise, after an increase of 0.1% in the fourth quarter.

The euro was also lower against the pound with EUR/GBP declining 0.62%, to hit 0.8443.

Also Wednesday, the Bank of England predicted that U.K. growth may accelerate to 0.5% in the second quarter from 0.3% in the first three months of the year.


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