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Forex - EUR/USD remains lower with ECB in focus

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Investing.com -

Investing.com - The euro remained slightly lower against the U.S. dollar on Wednesday, as earlier euro zone data and expectations for further easing measures by the European Central Bank continued to weigh, although mixed reports from the U.S. limited the greenback's gains.

EUR/USD hit 1.3600 during U.S. morning trade, the session low; the pair subsequently consolidated at 1.3610, slipping 0.13%.

The pair was likely to find support at 1.3562, the low of February 12 and resistance at 1.3668, the high of May 27.

The euro came under pressure after Markit earlier said that Germany's services purchasing managers' index fell to 56.0 in May from 56.4 in April, confounding expectations for the index to remain unchanged.

Separately, Spain's services PMI fell to 55.7 in May, from a reading of 56.5 the previous month, while Italy's services PMI rose to 51.6 last month, from 51.1 in April.

Sentiment on the euro also remained vulnerable after Eurostat on Tuesday said consumer price inflation in the euro zone increased by 0.5% last month, down from 0.7% in April. The rate missed expectations for a reading of 0.7% and stands well below the ECB target of near but just under 2%.

The report added to expectations that the ECB will take steps to tackle low consumer price growth, which is threatening the fragile recovery in the euro zone.

In the U.S., the Institute of Supply Management said its non-manufacturing index rose to a nine-month high of 56.3 in May, from a reading of 55.2 the previous month, compared to expectations for a rise to 55.5.

The data came after payroll processing firm ADP said non-farm private employment rose by 179,000 in May, below expectations for an increase of 210,000. April's figure was revised down to a gain of 215,000 from a previously reported increase of 220,000.

A separate report showed that U.S. trade deficit widened to $47.24 billion in April, from $44.18 billion in March whose figure was revised from a previously estimated deficit of $40.40 billion. Analysts had expected the trade deficit to widen to $40.80billion in April.

The euro was lower against the pound, with EUR/GBP edging down 0.14% to 0.8124.

Sterling found some support after Markit said the U.K. services PMI slipped to 58.6 last month, from a reading of 58.7 in April, compared to expectations for a fall to 58.2.

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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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