Forexpros –
Forexpros – The euro traded lower against the U.S. dollar Tuesday, as better-than-forecast U.S. service sector data lifted demand for the greenback while talks between finance ministers from the Group of Seven nations ended without any breakthrough on the euro zone crisis.
EUR/USD hit 1.2411 during U.S. trade, the session low; the pair subsequently consolidated at 1.2445, giving back 0.42%.
The pair was likely to find support at 1.2335, Thursday’s low and resistance at 1.2508, the session high.
In the U.S., the Institute of Supply Management reported its non-manufacturing purchasing manager’s index inched up to 53.7 last month from a reading of 53.5 in April. Analysts had expected the index to remain unchanged.
Meanwhile, a teleconference between finance ministers from the G7 group of industrialized nations concluded without any clear signs of progress in tackling the ongoing sovereign-debt crisis in the euro zone.
Speaking following the talks, Japan’s Finance Minister Jun Azumi said G7 members agreed to work together to deal with problems in Spain, while adding that officials did not discuss the possibility of a Greek exit from the euro area.
The euro fell to a session low against the greenback earlier after Spain’s treasury minister said that financial markets were effectively closed to Spain because of the current high level of the country’s borrowing costs.
In addition, weak euro zone services data underlined concerns over the ongoing deterioration in the region’s economy.
Revised data showed that the euro zone’s services sector contracted at a slightly slower rate than initially expected in May, but still shrank at the fastest pace since June 2009.
The final euro zone services sector index posted a reading of 46.7 in May, up from a preliminary estimate of 46.5, but still below the key 50 level. In other euro bearish news, a report indicated that euro zone retail sales dropped 1% in April, disappointing expectations for a more modest 0.1% decline.
The euro was lower against the pound, with EUR/GBP falling 0.30% to hit 0.8099 but edged higher against the yen, with EUR/JPY easing up 0.09% to hit 98.00.
In addition Tuesday, official data showed that German factory orders dropped 1.9% in April, compared to expectations for a 1% decline, fanning concerns over the impact of the ongoing sovereign debt crisis on the region’s largest economy.
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