Forex - EUR/USD lower as ECB meeting in focus

Published 05/03/2012, 02:31 AM
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Investing.com - The euro was slightly lower against the U.S. dollar in quiet trade on Thursday, as investors awaited the outcome of a European Central Bank meeting later in the day, following weak euro zone economic data on Wednesday.

EUR/USD hit 1.3137 during late Asian trade, the session low; the pair subsequently consolidated at 1.3144, slipping 0.10%.

The pair was likely to find support at 1.3104, the low of April 23 and short-term resistance at 1.3158, the session high.

The euro weakened broadly on Wednesday after data showing that the final euro zone manufacturing index slumped to a 34-month low in April, while the unemployment rate in the bloc climbed to a record 10.7% in March.

Investors were eyeing the outcome of the ECB meeting amid ongoing concerns over elevated borrowing costs for vulnerable peripheral nations, particularly Spain.

In the U.S., data on Wednesday showed that the private sector added 119,000 jobs in April, far short of expectations for a gain of 177,000. It was the smallest increase in ADP nonfarm payrolls since September 2011.

The data added to fears that the economic recovery in the U.S. is losing momentum, ahead of a government report on nonfarm payrolls on Friday, after government in data March showed a slowdown in hiring.

Trading conditions remained quiet on Thursday, with markets in Japan closed for the Golden Week holiday.

The euro was little changed against the pound and the yen, with EUR/GBP dipping 0.02% to hit 0.8120 and EUR/JPY inching up 0.04% to hit 105.50.

Later in the day, the ECB was to announce its benchmark interest rate. The announcement was to be followed by a press conference with ECB head Mario Draghi.

The U.S. was to produce government data on unemployment claims, as well as preliminary data on nonfarm productivity and unit labor costs. In addition, the Institute of Supply Management was to produce a report on service sector growth.

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