Forexpros – The euro erased gains against the U.S. dollar on Tuesday, pulling away from the session high in quiet trade as concerns over the outlook for economic growth in the euro zone weighed.
EUR/USD retreated from 1.3368, the session high, to hit 1.3316 during European afternoon trade, dipping 0.02%.
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.
Sentiment on the shared currency was hit after official data confirmed that the bloc’s 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.
A separate report 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.
Data on Monday 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 had strengthened against the greenback earlier after a report on Monday showed the U.S. manufacturing sector expanded more-than-forecast in March, while official data from China on Sunday showed that manufacturing activity in the world’s second largest economy jumped to an 11-month high last month.
The euro clung to gains against the pound and the yen, with EUR/GBP up 0.15% to hit 0.8324 and EUR/JPY inching up 0.07% to hit 109.40.
Later in the day, the U.S. was to release official data on factory orders, while the Federal Reserve was to release the minutes of its March policy meeting.
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