Forexpros – The euro fell slightly against the dollar Wednesday, easing a bit in light profit-taking after strong manufacturing data emerging from the U.S. sparked demand for risky assets like stocks and currencies besides the dollar.
EUR/USD hit 1.3049 during early Asian trading, down 0.01%, up a bit from a session low of 1.3046 and off from a high of 1.3059.
The pair was likely to test support at 1.2936, Tuesday’s low, and resistance at 1.3077, Tuesday’s high.
In the U.S., the Institute of Supply Management’s Manufacturing Purchasing Managers Index rose to 53.9 in December from 52.7 in November, beating expectations for a 53.2 reading.
In China, a worldwide exporting giant, similar data fueled hopes that demand for manufactured goods was on the rise globally.
The data sent investors selling the safe-haven greenback and snapping up other currencies to invest in securities across the U.S., Europe and elsewhere.
“We are in a situation where stronger U.S. data does lead to risk appetite elsewhere and definitely to a weaker U.S. dollar,” said Adam Carr, a senior economist in Sydney at ICAP Australia, according to Bloomberg.
“The global economy is a lot better than people were expecting.”
Meanwhile the dollar was up slightly in early Wednesday Asian trading, regaining some strength lost in the risk-on frenzy.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.03% at 79.98.
Meanwhile, the euro was up against the pound and down against the yen, with EUR/GBP rising 0.02% to hit 0.8342 and EUR/JPY falling 0.15% to 99.98.
On Friday, the U.S. Bureau of Labor Statistics will release its December unemployment report, a key metric for the world’s largest economy.
A precursor to that indicator comes out on Thursday, the ADP National Employment Report, which measures nonfarm payrolls similar to official data, while weekly initial jobless claims will also publish.
On Wednesday, French and eurozone inflation data will publish.
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