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Forex - EUR/USD remains higher after disappointing U.S. data

Published 05/21/2015, 10:09 AM
© Reuters.  Euro holds gains vs. greenback as U.S. data disappoints
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Investing.com - The euro remained higher against the U.S. dollar on Thursday, after a flurry of disappointing U.S. economic reports fuelled fresh concerns over the strength of the recovery, weighing on the greenback.

EUR/USD hit 1.1181 during U.S. morning trade, the pair's highest since Tuesday; the pair subsequently consolidated at 1.1131, rising 0.34%.

The pair was likely to find support at 1.0958, the low of April 29 and resistance at 1.1277, the high of May 12.

In a report, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending May 16 rose by 10,000 to 274,000 from the previous week's total of 264,000.

Analysts had expected initial jobless claims to rise by 7,000 to 271,000 last week.

Separately, the National Association of Realtors said that existing home sales fell 3.3% in April to 5.04 million units from the previous month's revised total of 5.21 million units. Analysts had expected existing home sales to rise 1.0% to 5.24 million units last month.

In addition, the Federal Reserve Bank of Philadelphia said that its manufacturing index declined to 6.7 this month from a reading of 7.5 in April, confounding expectations for a rise to 8.0.

The data came after Wednesday’s minutes of the Federal Reserve's April meeting did little to alter expectations that the central bank will hold off on raising rates until later this year, with most officials believing that a June rate hike would be premature.

Investors were turning their attention to Friday’s U.S. inflation data and a speech by Federal Reserve Chair Janet Yellen for fresh indications on how the economy is performing.

The single currency found support after data showed that the preliminary reading of the French composite purchasing managers' index rose to 51.0 up from 50.6 in April, moving further above the 50 level which separates expansion and contraction.

But activity in Germany, the euro area’s largest economy slowed to a five month low, adding to concerns that economic growth is losing momentum.

The preliminary euro zone composite PMI slid to a three month low of 53.4, down from 53.9 in April.

The euro was lower against the pound, with EUR/GBP declining 0.54% to 0.7100.

In the U.K., data earlier showed that retail sales jumped 1.2% last month, far more than forecasts for an increase of 0.4%.

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