Forexpros – The euro extended losses against the U.S. dollar on Wednesday, falling to a three-day low, following the release of weak employment and manufacturing data from across the euro zone.
EUR/USD hit 1.3166 during European morning trade, the pair’s lowest since April 27; the pair subsequently consolidated at 1.3173, shedding 0.48%.
The pair was likely to find support at 1.3068, the low of April 19 and resistance at 1.3240, the session high.
In Germany, official data showed that number of people unemployed increased by a seasonally adjusted 19,000 in April, confounding expectations for a decline of 10,000. The country’s unemployment rate came in at 6.8%, against expectations for an unchanged reading at 6.7%.
In Italy, official data showed that the unemployment rate unexpectedly jumped to 9.8% for March, the highest level since the current index began in 2004, from 9.3% the previous month.
Meanwhile, euro zone manufacturing data also came in worse-than-expected, with the final manufacturing purchasing managers’ index slumping to a 34-month low of 45.9 in April, down from 47.7 in March and below the preliminary estimate of 46.0.
The data showed that German manufacturing output fell at the fastest rate since July 2009, with its manufacturing PMI tumbling to 46.2, from 48.4 in March.
The dollar remained supported after data Tuesday showing that the U.S. manufacturing sector expanded at the fastest rate in 10 months in April eased concerns that the economic recovery in the U.S. is losing momentum in the wake of a string of recent disappointing data and dampened speculation over the possibility of a third round of easing by the Federal Reserve.
The euro was also down against the pound and the yen, with EUR/GBP shedding 0.34% to trade within striking distance of a 22-month low at 0.8132 and EUR/JPY losing 0.25% to hit 105.74.
Later in the day, the U.S. was to produce a report on ADP nonfarm payrolls, as well as government data on factory orders and crude oil stockpiles.
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