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Forex - EUR/USD gains in early Asian trade

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Forexpros - The euro advanced against the U.S. dollar Wednesday, following the release of data showing a drop in service sector activity and lower factory orders in the U.S.

EUR/USD hit 1.4321 during early Asian trade, the pair's lowest since July 30; the pair subsequently consolidated at 1.4348, rising 0.17%.

The pair was likely to find support at 1.4321, the day's low, and resistance at 1.4374, Tuesday's high.

Service sector activity in the U.S. declined unexpectedly in July, industry data showed on Wednesday.

The Institute of Supply Management said its non-manufacturing purchasing manager's index fell to 52.7 in July from 53.3 in June. Analysts had expected the index to rise to 53.8 in July.

An index reading above 50.0 indicates general expansion in the the non-manufacturing sector, while below 50.0 indicates the sector is contracting.

In a separate announcement from the U.S. Census Bureau, U.S. factory orders fell more than expected in June by 0.8%, down from a revised 0.6% rise the previous month. Forecasts were for a 0.5% decline.

Meanwhile, Eurostat said earlier in the day that retail sales in the euro-zone rose by a seasonally adjusted 0.9% in June, above expectations of a 0.5% increase. May's revised figure showed a drop of 1.3%.

The euro was higher against the both the British pound and the Japanese yen, with EUR/GBP dipping 0.15% to hit 0.8730 and EUR/JPY up by 0.30% to hit 110.70.

The European Central Bank was scheduled to hold its monthly news conference Thursday, where investors were to look for any indication of changes in short-term interest rates, currently set at 1.5%.

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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.

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