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Forex - EUR/USD lower after strong U.S. manufacturing report

Published 05/02/2012, 02:31 AM
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Investing.com - The euro was lower against the broadly stronger U.S. dollar on Wednesday, after a report showing that the U.S. manufacturing sector expanded at the fastest rate in 10 months in April eased concerns over the outlook for the economy.

EUR/USD hit 1.3211 during late Asian trade, the session low; the pair subsequently consolidated at 1.3215, shedding 0.16%.

The pair was likely to find support at 1.3156, the low of April 27 and resistance at 1.3240, the session high.

The Institute for Supply Management said Tuesday that its index of manufacturing activity rose to 54.8 from 53.4 in March, defying expectations for a decline to 53.0.

The robust data offset concerns that the economic recovery in the U.S. is losing momentum in the wake of a string of recent disappointing data and dampened speculation over the possibility of a third round of easing by the Federal Reserve.

Market participants were shifting their focus to U.S. monthly jobs figures for April, to be released Friday after data in March showed a slowdown in hiring.

Meanwhile, sentiment on the euro remained soft ahead of weekend elections in Greece and France and the European Central Bank’s policy meeting on Thursday.

The euro was lower against the pound, with EUR/GBP shedding 0.18% to hit 0.8145 but pushed higher against the yen, with EUR/JPY adding 0.19% to hit 106.20.

Later in the day, the euro zone was to publish official data the unemployment rate, while Germany is to release government data on unemployment change.

The U.S. was to produce a report on ADP nonfarm payrolls, as well as government data on factory orders and crude oil stockpiles.

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