Forexpros – The euro fell against the dollar on Wednesday after the Federal Reserve released the minutes of its last monetary policy meeting, revealing that authorities are less inclined to roll out easing measures to jolt the economy, which would have weakened the dollar.
In Asian trading on Wednesday, EUR/USD hit 1.3227, down 0.05%, up from a session low of 1.3218 and off from a high of 1.3239.
The pair was likely to find support at 1.3214, Tuesday’s low and resistance at 1.3368, Tuesday’s high.
Federal Reserve minutes revealed that while the U.S. central bank remains concerned over the pace of economic recovery, namely in the labor market, it largely saw no need for stimulus measures at this time.
Talk that the Fed would inject more liquidity into the economy to juice up recovery has sent the dollar weakening, although the most recent minutes put to rest sentiment that easing remains possible.
Also in the U.S., slightly disappointing factory data hit the wire.
The Commerce Department reported that factory orders rose 1.3% in February, a little shy of market forecasts for a 1.5% gain.
Both the Fed minutes and factory data ended several sessions of risk-on trading and sent investors selling stocks and other currencies and restocking up on dollar positions.
News out of Europe tempered the euro’s gains somewhat.
Official data confirmed that the region’s economy contracted by 0.3% in the fourth quarter of 2011, unchanged from a preliminary estimate and in line with expectations.
Annualized gross domestic product contracted by 0.7% in the fourth quarter.
The euro, meanwhile, was flat against the pound and flat against the yen, with EUR/GBP trading at 0.8316 and EUR/JPY trading at 109.59.
Later Wednesday, eurozone retail sales will publish as will figures on German factory orders.
The ECB is to announce its latest decision on benchmark interest rates accompanied by a statement and press conference.
The U.S., the ADP nonfarm employment numbers will hit the wire as well as an ISM report on service sector activity and government data on crude oil stockpiles.
Later in the day, U.S. Treasury Secretary Timothy Geithner is due to speak.
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