EUR/USD trades steadily on mixed Euro zone economic data

EUR/USD traded little changed on Wednesday after a string of mixed Euro zone economic reports was released earlier in the day. Market players awaited the ECB decision on its benchmark interest rate, due tomorrow, as well as important series of economic data out of the United States.

The pair traded at 1.3597 at 13:03 GMT, gaining 0.06% on a daily basis. Support was likely to be found at December 3th low, 1.3524, while resistance was to be met at December 3th high, 1.3614.

On Wednesday, a string of Euro zone leading indicators was released. Germany and Spain expanded their services sector activity, while French and Italian services industry output contracted. However, the final reading of the Services PMI for the whole Euro area outperformed the preliminary value.

Spanish services sector activity expanded at the fastest pace since June 2010 in November, according to a report by the market research group Markit Economics. The Services PMI in the fourth-largest Euro zone economy rose to a seasonally-adjusted 51.5 in November, compared to the value of 49.6 in October. Analysts estimates pointed to a reading of 50.7. The index is based on a survey among managers in the services sector. A reading above 50.0 indicates industry expansion, while a lesser value indicates contraction.

Activity in Italian sector of services contracted, with the corresponding index falling to a seasonally adjusted value of 47.2 in November, short of the projected 50.4 and less than Octobers value of 50.5.

Final data showed that the French services sector contracted at a faster pace than initially expected in November, hitting a five-month low. The final Services PMI declined to a seasonally adjusted reading of 48.0 in November, short of expectations of a reading of 48.8 and less than the preliminary value of 48.8.

Meanwhile, the services sector in Germany, which is the largest Euro zone economy, expanded at a faster-than-expected pace in November, hitting a ten-month high. Revised data showed the final Services PMI rose to a seasonally adjusted 55.7 in November, while the preliminary reading was 54.5. Last month the index stood at 52.9, while projections pointed that the final services PMI will remain steady at 54.5.

The increase in German services sector activity, helped the Euro-area to outweigh the initial estimates about its Services PMI in November. The index in the region rose to 51.2 in November, compared to a preliminary reading of 50.9 and a value of 51.6 in October.

Eurostat reported that the Euro zone economy grew in line with preliminary estimates in Q3. The preliminary Euro zone GDP grew by seasonally adjusted 0.1% in Q3, in line with expectations and unchanged from the initial estimate. Euro zones GDP expanded 0.3% in the preceding quarter. Euro zones GDP declined 0.4% in Q3 compared to the same period a year ago, which was again in line with expectations and matching the rate of decrease recorded in the second quarter.

According to another report by Eurostat, retail sales in the Euro zone declined both on a monthly and annual basis. On a monthly basis, retail sales dropped 0.2% in November, compared to a 0.6% decline in October, but confounding expectations of a 0.1% gain. Annual retail sales declined 0.1% in November, and again disappointed projections pointing a 1.0% gain.

The ECB cut borrowing costs to a record-low level of 0.25 percent on November 7th, partly on forecast for “continued, albeit modest, growth in the second half of the year.” The ECB will announce tomorrow its decision on the benchmark interest rate, as the bank may leave interest rates unchanged.

Meanwhile, market players awaited the release of the ADP report on private sector job creation in US, due later today. Projections point to 170 000 new employees been hired in November, compared to 130 000 the preceding month.

On Thursday, December 5th, the preliminary US GDP for the third quarter is expected to be revised upward to 3.1%, up from initially estimated at 2.8% in October.

On Friday, December 6th, the Labor Department will release the keenly anticipated data on non-farm payrolls and rate of unemployment for November. According to analysts’ projections, numbers will probably show that US employers hired 183 000 workers in November, compared to 204 000 in October. This will be the largest annual gain in payrolls since 2005. Meanwhile, the unemployment rate is projected to lower to 7.2%, the same rate as in September and the lowest since November 2008.

GBP/USD hit a session low at 1.6329 at 09:28 GMT, after which the pair consolidated at 1.6362, slipping 0.18%. The pair was trading at 1.6362 by 10:45 GMT. Support was likely to be received at November 29th low, 1.6315, while resistance was to be met at December 3rd high, 1.6437.

AUD/USD fell to a daily low at 0.9033 at 7:15 GMT, also the pair’s lowest point since September 3rd, after which consolidation followed at 0.9036, plunging 1.09% for the day. Support was likely to be received at September 3rd low, 0.8972, while resistance was to be encountered at current session high, 0.9141.

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