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Forex - EUR/USD remains lower after U.S. factory data

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Shutterstock photo - The euro remained lower against the dollar on Tuesday after data showed that U.S. factory orders rose more than expected in May and investors awaited central bank meetings and U.S. nonfarm payrolls data later in the week.

EUR/USD hit 1.2991 during U.S. morning trade, the pair's lowest since June 26; the pair subsequently consolidated at 1.3015, shedding 0.36%.

The pair is likely to find support at 1.2954, the low of June 3 and resistance at 1.3077, the session high.

The Commerce Department said U.S. factory orders rose by a seasonally adjusted 2.1% in May, compared to expectations for an increase of 2%.

Investors were looking ahead to Friday's U.S. nonfarm payrolls data, for further clues on when the Federal Reserve may decide to unwind its USD85 billion-a-month stimulus program.

The single currency came under pressure after Portugal's Finance Minister Vitor Gaspar resigned late Monday, after recent figures indicated that the country's budget deficit widened in the first quarter.

The yield on Portugal's 10-year government bond rose to 6.51% on Tuesday, from 6.4% on Monday.

The European Central Bank was expected to reiterate that an exit from loose monetary policy remains distant at its monthly meeting on Thursday, despite data on Monday indicating that the slump in the euro zone's manufacturing sector is easing.

The euro was steady against the pound, with EUR/GBP dipping 0.02% to 0.8581 and was higher against the yen, with EUR/JPY rising 0.32% to 130.58.

Earlier Tuesday, data showed that construction activity in the U.K. expanded at the fastest pace since May 2012 in June.

Markit said the U.K. construction purchasing managers' index rose to a seasonally adjusted 51.0 from 50.8 in May, slightly below expectations for a reading of 51.1.

Senior Markit economist Tim Moore said the improvement in overall construction output boosted the outlook for second quarter growth and lowered the chances for additional easing measures by the Bank of England at its monthly policy meeting on Thursday. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

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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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