Forexpros – The euro traded higher against the U.S. dollar Tuesday, depite solid U.S. factory orders and continued contraction in the euro zone as investors await the Federal Reserve’s meeting minutes for future monetary policy hints
EUR/USD hit 1.3301 during U.S. morning trade, the session low; the pair subsequently consolidated at 1.3333, gaining 0.10 %.
The pair was likely to find support at 1.3251, the low of March 29 and resistance at 1.3379, Monday’s high and an almost one-month high.
The Commerce Department reported U.S. factory orders climbed 1.3% in February, erasing the previous months downwardly revised 1.1% decline, but missed expectations for a 1.5% increase.
Investors are proceeding with caution prior to the Federal Reserve minutes, that may signal a third round of monetary easing to support growth.
Meanwhile, concerns over the economic outlook for the euro zone were increased after official data confirmed that the regions economy contracted by 0.3% in the final three months of 2011, unchanged from a preliminary estimate. Annualized gross domestic product contracted by 0.7% in the fourth quarter.
In addition, Monday’s data showed that manufacturing activity in the euro zone remained in contraction territory for the eighth successive month in March, while a separate report showed that the bloc’s unemployment rate ticked up to a record high of 10.8% in February.
The euro remained higher against the pound and the yen, with EUR/GBP up 0.54% to hit 0.8356 and EUR/JPY adding 0.20% to hit 109.54.
In other economic news Tuesday, official data showed that producer price inflation in the euro zone rose more-than-expected in February, climbing 0.6%, slightly higher than expectations for a 0.5% gain.
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