Forex-EUR/USD eases higher despite PMI, Greek worries

Investing.com - The euro traded slighted higher Wednesday against the U.S. dollar as weak euro zone PMI data and Greek fears kept the single currency in a tight range.

EUR/USD hit 1.3212 during U.S. trade, the session low; the pair subsequently consolidated at 1.3251, adding 0.13%.

The pair was likely to find support at 1.3171, Monday’s low and resistance at 1.3292, Tuesday’s high and an eight-day high.

Investors remained cautious amid ongoing uncertainty over whether a second EUR130 billion bailout for Greece will be enough to resolve the country’s fiscal woes as the economic situation continues to worsen.

The bearish sentiment was stroked when London based, Markit Economics said its composite purchasing manager index for both service and manufacturing dropped to 49.7 in February from a reading of 50.4 in January in the euro zone.

This contraction of service and manufacturing output signals additional struggles ahead for the euro zone region.

Another report showed German services and manufacturing expansion surprisingly slowed in February further adding to the lack luster euro performance.
.
Meanwhile, in Greece, Fitch Rating slashed the island nations credit grade two levels to C from CCC after the country obtained approval to proceed with the bond exchange  to reduce its debt burden.

Adding to the Greek fears, Bank of England Deputy Governor, Charlie Bean stated, “While the agreement is certainly welcome, there still remains a possibility that events could unfold in a disorderly and damaging fashion at some time in the future.”

The euro was higher against the pound and the yen, with EUR/GBP advancing 0.81% to hit 0.8454 and EUR/JPY climbing 0.85% to hit 106.44.

In the U.S., a report by the National Association of Realtors showed that existing home sales rose by 4.3% to a seasonally adjusted 4.57 million units in January, disappointing expectations for a gain of 6.2% to 4.67 million units.