The euro was little changed against the US dollar on Tuesday, as market players expected the reports on the preliminary value of Italys Gross Domestic Product and Germanys factory orders, scheduled for release later in the day.
EUR/USD recorded the lowest point during todays session at 1.3245 at 6:34 GMT, after which consolidation followed at 1.3260. Support was likely to be found at July 31st low, 1.3208, while resistance was to be met at August 5th high, 1.3299.
The series of PMI reports, regarding the sector of services in the first four largest economies in the Euro zone showed certain improvement in July. Euro zone’s Final Services PMI stood at 49.8, slightly above the expected 49.6, as in June the index pointed also 49.6.
“The euro region’s economy shows signs of bottoming out, albeit at a very low level,” said Kengo Suzuki, chief currency strategist in Tokyo at Mizuho Securities Co., cited by Bloomberg. “A factor that’s supporting the euro is the easing of concern over a breakup of the currency bloc.”
Meanwhile, the US dollar received support after on Monday the Institute for Supply Management (ISM) said that the index of activity in the sector of services in the United States rose to a reading of 56.0 in July, reaching a five-month high, significantly outstripping estimates of a value of 53.1. This data came in consonance with the released report on Friday on Non-Farm Payrolls, as it increased by 162 000 job positions in July, while preliminary estimates pointed an increase by 184 000 jobs. In addition, the unemployment rate in the United States decreased by 0.2% to 7.4% in July, reaching its lowest level since December 2008, while projections pointed a slighter decrease to 7.5%. US economy was on its way to recovery, but still the objectives, set by the Federal Reserve Bank, were to be met in order a scale back of stimulus to be introduced.
Elsewhere, the euro was slightly changed against the British pound, as EUR/GBP cross ticked down 0.02% to trade at 0.8634 at 8:26 GMT. EUR/JPY, on the other hand, added 0.12% to 130.52 at 8:27 GMT.
Ultimately, the euro has advanced 5.6% during this year, the best performer among 10 developed-nation currencies, tracked by Bloomberg Correlation Weighted Indexes. US dollar has risen by 5.1%, while the Japanese yen has slumped 8.8%.
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