Forexpros – The euro was steady against the dollar on Tuesday, trading calmly and erasing earlier losses from news that Spain has officially slid into a recession, which sparked earlier safe-haven demand for the dollar.
Tepid manufacturing data out of the U.S. cooled demand for the greenback.
In Asian trading on Tuesday, EUR/USD was trading at 1.3241, up 0.02%, up from a session low of 1.3238 and off from a high of 1.3243.
The pair was likely to find support at 1.3158, the low on April 27, and resistance at 1.3270, the high of April 27.
In Europe, Spain reported that it had entered its second recession since 2009, with official data revealing the country’s gross domestic product shrank by 0.3% in the first quarter of this year, the same amount it contracted during the fourth quarter of 2011.
The news sent investors ditching the euro in search for safety assets like the dollar, although the news out of the U.S. turned out to be disconcerting for many traders.
The Chicago purchasing managers’ index, a key gauge for Midwest manufacturing activity, fell by 6.0 points to a seasonally adjusted 56.2 in April from a reading of 62.2 in March, the worst reading since November of 2009.
Analysts had expected the index to decline to only 61.0 in April.
The Bureau of Economic Analysis, meanwhile, reported that consumer spending jumped 0.3% in March, slowing from 0.9% the previous month and a little below market hopes for a 0.4% gain.
Personal incomes, meanwhile, rose 0.4% in March, outpacing market forecasts for 0.3% growth.
Mixed data curbed the run for the dollar, especially with markets already edgy over Friday’s jobs report.
Talk that the Federal Reserve will consider monetary easing measures to stimulate the economy has been growing thanks to weak economic indicators, prompting some investors to sell greenbacks and jump to the sidelines to see how the April jobs report comes out.
The euro, meanwhile, was up against the pound and up against the yen, with EUR/GBP trading up 0.05% at 0.8158 and EUR/JPY trading up 0.12% at 105.81.
In Europe on Tuesday, markets in France, Germany, Italy and Switzerland will be closed on holiday.
In the U.S., the Institute for Supply Management is to release a closely watched report on manufacturing activity.
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