Forex - EUR/USD erases earlier losses stemming from German data

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Investing.com - The euro crept up in early Asian trading on Tuesday after bargain hunters snapped up nicely priced positions in the single currency and erased earlier losses stemming from conflicting German and European indicators.

In Asian trading on Wednesday, EUR/USD was up 0.10% at 1.2933, up from a session low of 1.2915 and off from a high of 1.3029.

The pair was likely to find support at 1.2747, the low from April 4, and resistance at 1.3194, the high from May 8.

In Europe on Tuesday, the ZEW index of German economic sentiment rose to 36.4 in May from 36.3 in April, well below expectations for a reading of 38.3, which put pressure on the single currency.

The index of current conditions fell to 8.9 from 9.2 in April, which markets interpreted as a sign that the German economy could face headwinds in its quest to rebound from a 0.5% contraction in the fourth quarter.

Inflation in Germany, meanwhile, met market forecasts.

The country's consumer price index contracted 0.5 % in April from March and rose 1.2% from April of last year, both figures in line with expectations.

Elsewhere, Eurostat, the European Union's statistics office, reported that industrial production in the euro area rose by 1% in March from February, more than double expectations for a 0.4% increase, which offset German sentiment data and allowed for bargain hunting.

Also supporting the euro, Spain saw borrowing costs fall to the lowest level since 2010 at an auction of 12-month government bonds.

Meanwhile in the U.S., the National Federation of Independent Business reported earlier that its small-business optimism index rose to 92.1 in April from 89.5 in March, well above market expectations.

Analysts were expecting a reading of 89.8.

Also in the U.S. import prices dropped 0.5% in March, meeting market expectations, while export prices declined 0.7%, according to the Bureau of Labor Statistics.

The euro, meanwhile, was flat against the pound and down against the yen, with EUR/GBP trading unchanged at 0.8496, and EUR/JPY trading down 0.10% at 132.20.

On Wednesday, the eurozone is to release preliminary data on first-quarter gross domestic product growth.

Germany, France and Italy are to release individual data on first-quarter growth.

The U.S. is to release data on producer price inflation, industrial production, the capacity utilization rate and a report on manufacturing activity in New York State.








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This article appears in: Investing , Forex and Currencies

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