The euro showed little changes against the US dollar on Monday, with market players focusing on Wednesdays policy meeting by the Federal Reserve Bank.
EUR/USD pair hit 1.3358 during European afternoon trade, currently the session high, after which consolidation followed at 1.3343. Support was likely to be received at June 13th low, 1.3277, while resistance was to be met at June 13th high, 1.3389.
Investors remained wary ahead of Fed’s policy statement on Wednesday, while uncertainty grew over the bank’s next move. US dollar lost positions against its major peers last week amid growing expectations that the US central bank will start tapering its bond purchases later this year.
On Monday official data stated that the New York Empire Manufacturing Index recorded an unexpected increase in June to a reading of 7.84 from -1.43 during May. Results far exceeded projections of a value at 0.00, but, however the comprising indexes of manufacturing, new orders and employment decreased sharply. New York manufacturers stated that economic conditions continued to improve, but yet they had no intentions of manufacturing expansion or posting new jobs. The report was in consonance with the darker overall situation in the sector of manufacturing during the second quarter of the year.
Meanwhile, earlier today official report showed that Euro zone recorded a smaller surplus than expected on its Trade Balance in April, 16.1 billion EUR, compared to 21.2 billion EUR. Data from Italy alone showed a contracted trade surplus in April, that amounted at 1.907 billion EUR from 3.240 billion EUR in March. Export in April remained unchanged, compared to Marchs value, while import decreased by 0.9% during the same period. In annual terms, export in Italy rose by 4.4%, while import shrank by 2.6%. Italys Trade balance with countries outside the EU produced a 1.5 billion EUR surplus, while trade balance with EU countries recorded a surplus of 0.441 billion EUR in April.
Additionally, it became clear that Labour Cost Index in the single currency zone managed to accelerate during Q1, registering a 1.6% increase on annual basis, compared to the 1.3% rise during the last quarter of 2012.
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