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Forex - EUR/USD steady on upbeat U.S., euro zone data

Published 07/24/2014, 11:52 AM
Updated 07/24/2014, 11:54 AM
Euro trades steady against dollar on upbeat data on both sides of the Atlantic

Investing.com - Upbeat data in both the U.S. and the euro zone sparked demand for both the euro and the greenback on Thursday, which steadied the pair in late-morning trading.

In U.S. trading, EUR/USD was up 0.02% at 1.3465, up from a session low of 1.3438 and off a high of 1.3485.

The pair was likely to find support at 1.3399, the low from Nov. 21, 2013, and resistance at 1.3549, Monday's high.

The dollar firmed against the euro earlier after data revealed initial jobless claims in the U.S. fell to an eight-year low, though upbeat factory data out of Europe fueled demand for the single currency.

The U.S. Department of Labor reported earlier that the number of individuals filing for initial jobless benefits in the week ending July 19 declined by 19,000 to 284,000, down from the previous week’s total of 303,000.

Analysts had expected jobless claims to rise by 5,000 to 308,000 last week, and the positive numbers fueled speculation that the Federal Reserve may hike interest rates sooner than markets once anticipated.

While the Fed is seen closing its monthly bond-buying stimulus program likely in October, uncertainty as to how much time will pass from that point until rate hikes begin makes the dollar move on both positive and negative indicators.

A separate report showed that U.S. new home sales dropped by 8.1% to 406,000 units last month, worse than expectations for a decline of 5.3%, pointing to underlying weakness in the housing sector, which capped the dollar's advance along with cheery European factory data.

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A preliminary reading of the euro zone manufacturing purchasing managers’ index rose to a two-month high of 51.9 for July, beating market calls for a 51.7 reading. The bloc’s services PMI jumped to a 38-month high of 54.4, beating expectations for a 52.7 reading.

Private sector activity in Germany also expanded in July, with the country’s services PMI jumping to a 37-month high. The French service sector also expanded this month, but the contraction in the country's manufacturing sector deepened.

Ongoing concerns that conflicts in Ukraine and Gaza will dampen global economic recovery weighed on both currencies.

Elsewhere, the euro was up against the pound, with EUR/GBP up 0.41% at 0.7932, and up against the yen, with EUR/JPY up 0.31% at 137.07.

The pound softened the Office for National Statistics reported that U.K. retail increased by 3.6% compared with June 2013 and by 0.1% compared with May 2014.

Markets were expecting a 3.9% yearly gain and a 0.3% monthly increase.

On Friday in the euro zone, Germany is to publish the Gfk report on consumer climate and the Ifo report on business climate.

The U.S. is to round up the week with data on durable goods orders.

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