Forex - EUR/USD remains lower, eyes on ECB meeting

Published 05/02/2012, 10:29 AM
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Investing.com - The euro remained lower against the U.S. dollar on Wednesday, as investors turned to the European Central Bank’s policy meeting on Thursday while a flurry of weak economic data from the U.S. and the euro zone dented market sentiment.

EUR/USD hit 1.3123 during U.S. morning trade, the pair’s lowest since April 16; the pair subsequently consolidated at 1.3152, declining 0.64%.

The pair was likely to find support at 1.3104, the low of April 23 and resistance at 1.3240, the session high.

U.S. payroll processing firm ADP said that non-farm employment rose by 119,000 in April, the lowest increase since September 2011, after a 201,000 rise the previous month. Analysts had expected non-farm employment to rise by 178,000 in April.

Sentiment on the euro weakened broadly earlier after final euro zone manufacturing data for April came in weaker-than-expected, with the manufacturing purchasing managers’ index slumping to a 34-month low of 45.9 in April, down from 47.7 in March and below the preliminary estimate of 46.0.

German manufacturing output fell at the fastest rate since July 2009, with its manufacturing PMI tumbling to 46.2, from 48.4 in March, while a separate report showed that the German unemployment rate also rose last month.

A separate report showed that the unemployment rate in the euro zone rose to a fresh record high of 10.9% in March.

In Italy, official data showed that the unemployment rate unexpectedly jumped to 9.8% for March, the highest level since the current index began in 2004, from 9.3% the previous month.

Meanwhile, investors were jittery ahead of the ECB’s policy meeting on Thursday as well as weekend elections in Greece and France.

The euro was trading close to a fresh 22-month low against the pound with EUR/GBP shedding 0.42%, to hit 0.8126.

Also Wednesday, government report showed that factory orders in the U.S. declined 1.5% in March, in line with expectations and following a 1.1% rise the previous month.


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