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Forex - EUR/USD trims gains but remains close to 7-month highs

Published 09/19/2013, 10:10 AM
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Investing.com - The euro trimmed gains against the U.S. dollar on Thursday, after the release of strong U.S. manufacturing activity and home sales data, but remained close to seven-month highs as the Federal Reserve's decision to hold its bond purchase program continued to support.

EUR/USD hit 1.3568 during U.S. morning trade, the pair's highest since February 7; the pair subsequently consolidated at 1.3539, adding 0.13%.

The pair was likely to find support at 1.3338, Wednesday's low and resistance at 1.3596, the high of February 6.

Data showed that the Philly Fed manufacturing index rose to a 30-month high of 22.3 in September, from a reading of 9.3 the previous month, blowing past expectations for an increase to 10.0.

Industry data also showed that U.S. existing home sales rose 1.7% to 5.48 million units last month, from 5.39 million in July. Analysts had expected existing home sales to fall 2.6% to 5.25 million in August.

Earlier Thursday, the Department of Labor said the number of people who filed for unemployment assistance in the U.S. rose by 15,000 to a seasonally adjusted 309,000 in the week ending September 13, from an upwardly revised 294,000 the previous week.

Analysts had expected the number of people who filed for unemployment assistance to rise by 36,000 to 330,000 last week.

A separate report showed that the U.S. current account deficit narrowed to USD98.9 billion in the second quarter, from an downwardly revised deficit of USD104.9 billion in the three months to March. Analysts had expected the current account deficit to improve to a USD97 billion.

The data came a day after the Fed held back from reducing the USD85 billion pace of its monthly asset purchases.

Bernanke refused to commit to reducing bond purchases this year, saying the stimulus program was "not on a preset course."

The euro was also higher against the pound with EUR/GBP climbing 0.65%, to hit 0.8430.

Also Thursday, official data showed that U.K. retail sales fell 0.9% in August, confounding expectations for a 0.4% rise, after a 1.1% increase the previous month.

In addition, the Confederation of British Industry said its index of industrial order expectations rose to 9 in September, from a reading of zero in August, beating expectations for an increase to 2.


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