Investing.com - The euro traded lower against the dollar on Wednesday as investors avoided the single currency ahead of the European Central Bank's Thursday decision on monetary policy, though soft U.S. service-sector data capped the greenback's gains.
In U.S. trading, EUR/USD was trading at 1.3732, down 0.07%, up from a session low of 1.3707 and off a high of 1.3747.
The pair was likely to find support at 1.3643, last Thursday's low, and resistance at 1.3824, Friday's high.
Investors avoided the single currency and remained on the sidelines to await the ECB’s policy statement on Thursday.
Concerns persisted that the monetary authority could take steps to help shore up the region's still-fragile recovery, which overshadowed otherwise positive data.
Data on Wednesday revealed that the final euro zone composite purchasing managers’ index was revised up to a 32-month high of 53.3 from a preliminary estimate of 52.7.
The euro area services PMI rose 52.6 in February from 51.6 in January and higher than the flash estimate of 51.7.
Germany’s composite PMI soared to a 33-month high but France’s fell to a two-month low. Italy’s service sector grew to an almost three-year high last month.
Separately, Eurostat, the European Union's statistical arm, reported that retail sales in the euro zone rose 1.6% in January, blowing past expectations for a 0.8% gain.
On-year retail sales grew 1.3%, defying expectations for a 0.4% decline.
Separate data confirmed that the euro zone economy expanded 0.3% in the fourth quarter and grew 0.5% on a year-over-year basis, both figures in line with expectations.
Meanwhile in the U.S., investors shrugged off payroll processor ADP's nonfarm payrolls report, which revealed that the U.S. private sector added 139,000 jobs in February, below expectations for an increase of 160,000.
However, the U.S. dollar did take a hit after the Institute of Supply Management said its services purchasing managers' index fell to a 43-month low of 51.6 last month from 54.0 in January. Analysts had expected the index to tick down to 53.5 in February.
The euro was down against the pound, with EUR/GBP down 0.47% to 0.8209, and up against the yen, with EUR/JPY gaining 0.06% and trading at 140.56.
On Thursday, all eyes will focus on the European Central Bank's announcement on interest rates and monetary policy followed by a press conference with President Mario Draghi.
Elsewhere, Germany is to publish data on factory orders.
The U.S. is to publish the weekly report on initial jobless claims and data on factory orders.