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Forex - EUR/USD falls as market preps for possible ECB action

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Investing.com -

Investing.com - The euro fell against the dollar on Monday as investors bet the European Central Bank will loosen policy at its Thursday meeting, which overshadowed a lackluster U.S. manufacturing gauge and fueled demand for the greenback.

In U.S. trading, EUR/USD was down 0.21% at 1.3605, up from a session low of 1.3594 and off a high of 1.3638.

The pair was likely to find support at 1.3586, Thursday's low, and resistance at 1.3650, Friday's high.

The single currency came under pressure on expectations that the European Central Bank will take steps to tackle low inflation rates that are threatening an already fragile recovery in the single currency bloc, including cuts to all interest rates.

Earlier Monday, official data showed that Germany's consumer price index accelerated at an annualized rate of 0.9% last month, down from 1.3% in April. Analysts had expected German consumer prices to rise by 1.1% in May.

Separately, Markit research group said that Spain's manufacturing PMI rose to 52.9 this month, from 52.7 in May, in line with expectations, while Italy's manufacturing PMI slipped to 53.2 in June from 54.0 a month earlier, missing expectations for a 53.7 reading.

Meanwhile in the U.S., the Institute of Supply Management said its manufacturing purchasing managers' index ticked down to 53.2 in May from 54.9 in April, confounding expectations for a rise to 55.5.

Still, markets shrugged off the news, as any figure over 50 signifies expansion.

Elsewhere, the euro was down against the pound, with EUR/GBP down 0.22% at 0.8119, and up against the yen, with EUR/JPY up 0.31% at 139.20.

Markit said the U.K. manufacturing PMI ticked down to 57.0 in June from 57.3 the previous month, in line with expectations.

A separate report showed that net lending to individuals in the U.K. rose by £2.4 billion in April, below expectations for a £2.7 billion increase, after a downwardly revised £2.8 billion gain in March.

On Tuesday, the euro zone is to release preliminary data on consumer inflation as well as a report on the unemployment rate. Spain is also to publish data on the change in the number of people employed.

The U.S. is to produce data on factory orders.

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


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

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