Forex Pros – The euro erased gains against the U.S. dollar in choppy trade on Wednesday, retreating from a three-week high, following German media reports that the International Monetary Fund will not pay its share of aid to Greece at the end of June.
EUR/USD pulled back from 1.4448, the pair’s highest since May 6 to hit 1.4388 during European late morning trade, dipping 0.05%.
The pair was likely to find support at 1.4276, Tuesday’s low and resistance at 1.4587, the high of May 6.
German newspaper Frankfurter Allgemeine Zeitung said it was now considered certain that the IMF will not pay its share of a fifth tranche of aid to Greece, due on June 24. It did not cite any sources.
The shared currency found support earlier in the session after Greek media outlets reported that the Greek government’s mid-term fiscal plans were expected to be finalized by Wednesday night or Thursday morning.
Also Wednesday, revised data showed that the euro zone manufacturing PMI fell to a seven-month low of 54.6 last month, down from an initial estimate of 54.8.
The report said that in all the countries covered, the PMI data “signaled a broad-based slowdown in the pace of recovery, with headline [indexes] retreating from their April levels.”
Meanwhile, the euro was slightly higher against the pound, with EUR/GBP easing up 0.08% to hit 0.8758.
Later Wednesday, European Central Bank President Jean-Claude Trichet was to speak, while U.S. payroll processing firm ADP was to publish its report on non-farm payrolls. Elsewhere, the U.S. Institute of Supply Management was to publish data on manufacturing activity.
ForexPros.com
