Investing.com - The dollar firmed against the euro on Tuesday even after a widely-watched U.S. factory barometer missed expectations, as the data was still viewed as strong enough to depict a U.S. economy that continues to recover.
In U.S. trading, EUR/USD was down 0.08% at 1.3682, up from a session low of 1.3676 and off a high of 1.3700.
The pair was likely to find support at 1.3640, Monday''s low, and resistance at 1.3723, the high from May 21.
The Institute for Supply Management reported earlier that its purchasing managers'' index fell to 55.3 in June from 55.4 in May. Analysts had expected the manufacturing PMI to increase to 55.8 in June, though the dollar posted slight gains, as any reading over 50 marks expansion.
Gains were limited, as the report came in wake of U.S. data released last week showing a 2.9% economic contraction in the first quarter, which fueled expectations that the Federal Reserve will keep rates on hold for an extended period.
Speaking Monday, San Francisco Fed President John Williams underlined this view, saying the bank will probably need to hold interest rates near zero for at least another year, despite signs that the economy is improving.
Still, the dollar found support on U.S. data and elsewhere.
China''s official purchasing managers'' index came in a 51.0 in June, in line with expectations and up from 50.8 in May, which also painted a picture of an improving global economy.
Elsewhere the final reading of the Markit Economic U.S. manufacturing PMI rose to 57.3 in June, the highest reading since May 2010. The report showed the fastest growth in output and new orders since April 2010.
Separately, the Commerce Department said construction spending rose 0.1% in May, below the expected 0.5% increase.
Meanwhile in Europe, revised data revealed that the euro zone’s manufacturing PMI dipped to a seven-month low of 51.8 in June, missing consensus forecasts for a 52.9 reading.
Germany''s PMI came in at 52.0, and eight-month low and shy of forecasts for a 52.4 reading.
A separate report showed that the region’s unemployment rate ticked down to 11.6% in May, revised from the initial reading of 11.7%.
Elsewhere, the euro was down against the pound, with EUR/GBP down 0.32% at 0.7978, and up against the yen, with EUR/JPY up 0.09% at 138.87.
On Wednesday in the euro zone, Spain is release data on the change in the number of people unemployed.
The U.S. is to release the ADP report on private sector job creation, which leads the government’s nonfarm payrolls report by two days. The U.S. is also to release data on factory orders.
Later Wednesday, Fed Chair Janet Yellen is to speak at an event in Washington; her comments will be closely watched.
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