Forex - EUR/USD steadies as market eyes ECB decision, U.S. data

Shutterstock photo
Shutterstock photo

Shutterstock photo - - The euro held steady against the dollar in early afternoon trading on Wednesday, as investors jumped to on the sidelines awaiting Thursday's European Central Bank decision on monetary policy and the U.S. August jobs report on Friday.

In U.S. trading, EUR/USD was up 0.02% at 1.3137, up from a session low of 1.3122 and off a high of 1.3160.

The pair was likely to find support at 1.3108, Tuesday's low, and resistance at 1.3220, last Thursday's high.

In the U.S., the U.S. Census Bureau reported earlier that factory orders rose 10.5% in July, below expectations for an increase of 11%, after a revised 1.5% rise in June, though the greenback still clung close to a one-year high against the euro.

On Tuesday, the Institute for Supply Management reported that its manufacturing purchasing managers' index jumped to 59.0 in August from 57.1 in July, defying analysts' calls for the index to tick down to 56.8.

On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.

In Europe, data revealed that euro zone retail sales fell 0.4% in July, in line with forecasts.

Investors were eager for the European Central Bank's announcement on policy on Thursday, with many investors betting that the monetary authority will roll quantitative easing measures to kick-start the economy after the euro area's annual inflation rate slowed to a five-year low last month.

On Friday, the U.S. will release its August nonfarm payroll report, and investors hope the data will serve as weather vane pointing to the direction of monetary policy.

The U.S. economy continues to gain steam, though Federal Reserve Chair Janet Yellen has expressed concern over slackness persistent in the labor market.

Both the greenback and the euro found support after Ukraine's President Petro Poroshenko said he had agreed with Russian President Vladimir Putin to take steps to establish a "permanent ceasefire" in eastern Ukraine.

Putin later said his views were "very close" with Poroshenko on finding a political way out of the conflict.

Elsewhere, the euro was up against the pound, with EUR/GBP up 0.15% at 0.7985, and down against the yen, with EUR/JPY down 0.18% at 137.77.

On Thursday, markets will track the ECB's decision on interest rates and monetary policy.

Elsewhere, the U.S. is to release trade-balance data, the ADP report on private-sector job creation and the weekly report on initial jobless claims.

Also on Thursday, the ISM is to publish a report on U.S. service sector activity.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics