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Forex - EUR/USD slips on soft European factory data

Published 06/23/2014, 11:55 AM
Updated 06/23/2014, 11:57 AM
Euro slips  against dollar on soft euro zone manufacturing data
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Investing.com - The dollar rose against the euro on Monday after data revealed output in European factories missed expectations in June.

In U.S. trading,EUR/USD was down 0.05% at 1.3593, up from a session low of 1.3564 and off a high of 1.3614.

The pair was likely to find support at 1.3513, the low from June 16, and resistance at 1.3643, Thursday's high.

The euro zone’s composite index of service and manufacturing sector activity fell to a six-month low of 52.8 in June from 53.5 in May, missing market calls for an unchanged reading, according to London-based Markit Economics.

France’s private sector continued to contract this month, dragging on the euro zone as a whole, while Germany private sector continued to expand this month.

The French manufacturing PMI tumbled to a six-month low of 47.8, down from 49.6 in May, while the service sector PMI fell to a four-month low of 48.2 from 49.1

Germany’s manufacturing PMI ticked up to a two-month high of 52.4 from 52.3 in May.

The country’s services PMI declined to a two-month low of 54.8 from 56.0 in May, but remained well above the 50 level that separates growth from contraction.

European Central Bank President Mario Draghi said over the weekend that interest rates would stay low over a longer period. He added that large-scale asset purchases are still part of the central bank's toolkit though monetary authorities would need to see inflation expectations deteriorate rolling out fresh quantitative easing programs.

The ECB cut interest rates to record lows and launched a series of measures to boost lending to companies earlier this month, in a bid to stave off the threat of deflation in the euro area and shore up the recovery.

Meanwhile, the dollar saw demand in wake of upbeat U.S. housing-sector data.

The National Association of Realtors reported earlier that existing home sales hit 4.89 million in May, up 4.9% from April's revised 4.66 million rate and above market calls for 4.73 million units.

Elsewhere, Markit Economic reported that U.S. manufacturing PMI rose to 57.5 in June from 56.4 in May, beating market calls for a 56.1 reading.

Elsewhere, the euro was flat against the pound, with EUR/GBP unchanged at 0.7992, and down against the yen, with EUR/JPY down 0.22% at 138.53.

On Tuesday in the euro zone, the Ifo Institute is to publish data on German business climate.

The U.S. is to release private sector data on consumer confidence, as well as a report on new home sales.

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