Forex - EUR/USD trims gains after euro zone PMI data

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Investing.com - " The euro eased off highs against the dollar on Thursday after data showed that manufacturing activity in the euro zone expanded at a slower than expected rate in October, indicating that the recovery remains sluggish.

EUR/USD pulled back from 1.3821, the highest since November 2011, the pair subsequently consolidated at 1.3787, still up 0.08% for the day.

The pair was likely to find support at 1.3740 and resistance at 1.3850.

The preliminary reading of the euro zone's manufacturing purchasing managers' index ticked up to 51.3 in October from a final reading of 51.1 in September, slightly below expectations for a reading of 51.4.

The euro zone services PMI fell to 50.9 this month from 52.2 in September.

Germany's manufacturing PMI edged up to 51.5 from a final reading of 51.1 in September, but the services PMI declined to a three-month low of 52.3.

Manufacturing and service sector activity in France declined unexpectedly this month.

The single currency rose to fresh 23-month highs against the dollar earlier after data showed that manufacturing activity in China expanded at the fastest rate in seven months in October.

The data offset fears over the Chinese economy, a day after market sentiment was hit by concerns that China's central bank would tighten monetary policy to help control inflation.

The dollar remained under pressure after data earlier in the week showing that U.S. jobs growth slowed in September cemented expectations that the Federal Reserve would continue the current pace of its asset purchase program well into next year.

Elsewhere, the euro slid lower against pound, with EUR/GBP slipping 0.12% to 0.8511 and was almost unchanged against the yen, with EUR/JPY edging up 0.01% to 134.21 after rising as high as 134.76 earlier.

Investors were looking ahead to U.S. data on initial jobless claims, the trade balance and new home sales later in the trading day.



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This article appears in: Investing , Forex and Currencies

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