Forex - EUR/USD hits fresh session lows after U.S. data

Investing.com - The euro fell to fresh session lows against the dollar on Thursday after data showed that the Philly Fed manufacturing index rose at the fastest pace since April 2011 in the current month and U.S. existing home sales rose more than expected in May.

EUR/USD hit 1.3161 during U.S. morning trade, the pair’s lowest since June 6; the pair subsequently consolidated at 1.3173, shedding 0.91%.

The pair was likely to find support at 1.3074, the low of June 6 and resistance at 1.3200.

The Federal Reserve Bank of Philadelphia said that its manufacturing index rose to 12.5 in June from minus 5.2 in May, outstripping expectations for a reading of minus 2.0.

A separate report showed that U.S. existing home sales climbed 4.2% to a seasonally adjusted 5.18 million units in May from April’s total of 4.97 million, and well above expectations for a 0.6% increase.

Earlier Thursday, the Department of Labor said the number of individuals filing for initial jobless benefits in the U.S. last week rose by 18,000 to a seasonally adjusted 354,000, compared to expectations for an increase of 4,000 to 340,000.

Demand for the dollar continued to be underpinned after the Federal Reserve said Wednesday it could start scaling back its bond buying program by the end of the year.

Fed Chairman Ben Bernanke said the bank could begin tapering its USD85 billion-a-month asset purchase program later this year and wind it down completely by the middle of 2014 if the economy picks up as the central bank expects.

The bank said it expects the U.S. economy to grow between 2.3% and 2.6% in 2013. The Fed also said it expects the unemployment rate to fall to between 6.5% and 6.8% by the end of 2014 and inflation to edge closer to its 2% target.

The euro fell to session lows against the pound, with EUR/GBP down 0.73% to 0.8522 and pared gains against the yen, with EUR/JPY rising 0.75% to 129.16, off session highs of 129.91.

Earlier Thursday, data showed that manufacturing activity in Germany contracted more than expected in June.

Germany’s manufacturing purchasing managers’ index fell to 48.7 in June compared to expectations for a reading of 49.8 and down from a final reading of 49.4 in May.

Activity in Germany’s services sector rose to a four-month high, with the services PMI improving to 51.3 from 49.7 in May.

The euro zone manufacturing PMI rose to 48.7 in June from a final reading of 48.3 in May, but remained well below the 50 level that separates contraction from expansion.

The bloc’s services PMI rose to a 15-month high of 48.6 from 47.2 in May, above expectations for an increase to 47.5.