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Forex - EUR/USD steady in holiday-thinned trade

Published 09/03/2012, 10:14 AM
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Investing.com - The euro was ticking up and down between small gains and losses against the U.S. dollar in thin trade on Monday, as investors anticipated the European Central Bank's policy setting meeting and U.S. government data on non-farm payrolls later in the week.

EUR/USD hit 1.2561 during U.S. morning hours, the session low; the pair subsequently consolidated at 1.2573, dipping 0.02%

The pair was likely to find support at 1.2492, Friday’s low and resistance at 1.2636, Friday’s high and a nine-week high.

The greenback remained under pressure after Federal Reserve Chairman Ben Bernanke said Friday that the Fed would act as needed to strengthen the U.S. economic recovery, but he stopped short of indicating that a fresh round of stimulus is imminent.

Speaking at the Fed’s annual symposium in Jackson Hole, Wyoming, Bernanke said the persistently high rate of unemployment was a “grave concern” and added that the bank’s easing program had been effective in providing “meaningful support" to the recovery.

Market sentiment remained cautious ahead of the ECB’s policy setting meeting on Thursday, amid speculation that the bank is working on measures to help stabilize the euro zone's sovereign debt markets.

But concerns over the outlook for growth weighed after revised data showed that the euro zone’s manufacturing sector contracted for the 13th consecutive month in August.

Markit said the bloc’s manufacturing purchasing managers’ index rose to 45.1 from July's 37-month low of 44, but remained well below the 50 mark that separates growth from contraction.

The euro was slightly lower against the pound and the yen, with EUR/GBP slipping 0.15% to 0.7917 and EUR/JPY losing 0.13% to trade at 98.44.

Trade looked likely to remain subdued on Monday, with markets in the U.S. closed for the Labor Day holiday.


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