IForex Daily : April 07, 2014

 | Apr 07, 2015 03:48AM ET

The U.S. dollar weakened broadly early on Monday, as indications that the U.S. economy slowed in the first quarter fuelled expectations that the Fed will delay a hike in interest rates until late 2015. The U.S. Institute of Supply Management said on Monday that its non-manufacturing purchasing manager's index slipped to 56.5 last month, in line with forecasts and down from a reading of 56.9 in February. The report came in after Friday's data from the Labor Department that the U.S. economy added 126,000 new jobs in March, the smallest increase since December 2013. The surprisingly weak data added to concerns over the outlook for economic growth after other recent economic reports pointed to a slowdown at the start of the year. However, the PMI Services Index, rose to 59.2 in March, more than one-half point higher than forecasts, causing the dollar to reverse part of the losses. The single currency found further support from hopes that Greece will repay the International Monetary Fund on time. International Monetary Fund head Christine Lagarde indicated that she is confident Greece will meet its obligation to make a €460 million payment to the fund by Thursday. For today the euro zone is to release revised data on service sector activity.

EUR/USD

Following the weak employment data on Friday, the euro gained some ground against the dollar early on Monday, however the U.S. dollar reversed some of the previous losses after strong services data improved the U.S. economic outlook. The PMI Services Index, rose to 59.2 in March, more than one-half point higher than March forecasts. The reading was also up more than two points from the final reading for February. A number of economists are looking at the service sector as a critical aspect of U.S. economic health. Elsewhere, Lagarde made the comments on Sunday night, following her meeting with Greece finance minister Yanis Varoufakis after exchanging views on current developments that it is commonly agreed that effective cooperation is in everyone's interest. Athens is expected to make a €460 million loan repayment to the IMF this Thursday. For today the euro zone is to release revised data on service sector activity.