The euro recorded a slight change against the US dollar on Tuesday after stronger than expected ISM manufacturing data was released on Monday from the United States, adding to expectations that the Federal Reserve Bank will begin to taper its Quantitative Easing by this years end.
EUR/USD increased to a session high at 1.3078 at 6:54 GMT, after which consolidated at 1.3070. Support was likely to be received at July 1st low, 1.3003, while resistance was to be encountered at June 28th high, 1.3123.
The Institute for Supply Management (ISM) in the United States reported on Monday, that its manufacturing PMI rose to a reading of 50.9 in June from 49.0 in May. Experts had projected a value of 50.5. In addition, Total Construction Spending in the US increased by 0.5% on a monthly basis to a seasonally adjusted annual value of 874.9 million USD.
At the same time, market players were looking ahead to Friday’s US non-farm payrolls data, in pursuit of further clues on when the Federal Reserve may decide to reduce its monthly bond purchases.
Earlier today it became clear, that the number of people, filed for unemployment assistance in Spain, decreased for the fourth month in a row in June by 127 248 (2.6%) to 4.76 million, far exceeding expectations that this number will drop by 83 500. During June 2012 the unemployed were 98 265 less. This could be a clear signal that the worst part of the recession in the country, maybe, remained in the past. June results showed the largest monthly decrease in the unemployment since the beginning of statistical records. Usually, in June employment in Spain increases due to active job hiring in the summer period, but in this case the decline in number was considerable.
Additionally, on Monday a report showed that Flash Harmonized Index of Consumer Prices (HICP) in the Euro zone advanced to 1.6% in June from 1.4% in May, meeting forecasts. However, Unemployment Rate in the euro region rose to 12.1% in May from a revised down 12.0% in April.
The euro remained stable against the British pound, as EUR/GBP cross dropped by a mere 0.01% to 0.8583. The common currency pushed higher against the Japanese yen, with EUR/JPY, adding 0.15% to 130.35.
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