Forexpros – The euro traded lower to steady against the dollar on Thursday after solid private-sector jobs numbers in the U.S. cemented expectations the Fed will back off from priming the economy via policy, while weak turnout at a Spanish bond auction stoked fears the European debt crisis may be coming out of hibernation.
In Asian trading on Thursday, EUR/USD was trading at 1.3140, down 0.02%, up from a session low of 1.3143 and off from a high of 1.3136.
The pair was likely to find support at 1.3108, Wednesday’s low and resistance at 1.3233, Wednesday’s high.
In the U.S., the ADP National Employment Report showed the country’s private sector added a net 209,000 nonfarm payrolls to the economy in March, above expectations for a gain of 200,000.
The ADP figures are released two days ahead of the government’s official unemployment figures, and many analysts have expected recent gains to temper somewhat.
However, most agree that more surprises on the upside will show the economy is clearly recovering and in less need of Federal Reserve stimulus measures that would weaken the dollar in exchange for more economic expansion.
Also in the U.S., the Institute of Supply Management said its non-manufacturing purchasing managers’ index declined by 1.3 points to 56.0 last month from a reading of 57.3 in February.
Analysts had expected the index, which gauges the health of the U.S. service sector, to decline by 0.3 points to 57.0 in March.
Weak service-sector data sent investors selling equities and stocking up on dollars, while stronger-than-expected unemployment rates bolstered market sentiment that the Fed is less likely to spur economic recovery via liquidity injections into the economy via quantitative easing.
Out of Europe, turnout at a Spanish bond auction fell a little short of expectations.
Spain’s Treasury auctioned EUR2.59 billon of government bonds, short of a EUR3.5 billion target, in the country’s first debt auction since last week’s austerity budget.
Following the auction, the yield on Spanish 10-year bonds climbed to 5.7%, up from 5.5% before the sale.
The Spanish government, meanwhile, has said the country’s public debt will rise to a record 79.8% of gross domestic product this year.
Also in Europe, the European Central Bank decided to hold interest rates unchanged at 1.0%, while ECB President Mario Draghi said headwinds still face the European economy.
The euro took a beating as a result of the greenback’s gain, but regained some strength early in Asian trading, paring some of its earlier losses and moving about in calmer fashion.
The euro, meanwhile, was down against the pound and down against the yen, with EUR/GBP trading down 0.02% at 0.8270 and EUR/JPY down 0.13% and trading at 108.23.
Later Thursday, the U.S. is to publish government data on continuing unemployment claims, a leading indicator of economic health, while in Europe, German industrial output figures are due out.
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