Forexpros – The euro remained almost unchanged against the U.S. dollar on Wednesday, as risk appetite was hit by disappointing data on business activity in the single currency zone and ongoing concerns over the sustainability of Greece’s debt burden.
EUR/USD hit 1.3212 during European afternoon trade, the session low; the pair subsequently consolidated at 1.3231, dipping 0.02%.
The pair was likely to find support at 1.3171, Monday’s low and resistance at 1.3292, Tuesday’s high and an eight-day high.
Sentiment on the single currency was dented amid uncertainty over whether Greece can follow through with fiscal reforms after euro zone finance ministers signed off on a EUR130 billion rescue package on Tuesday, removing the risk of an imminent default in March.
Meanwhile, preliminary data showed that manufacturing activity in the euro zone improved less-than-expected in February, remaining in contraction territory for the seventh consecutive month, while service sector activity contracted unexpectedly.
Data from Germany and France showed modest growth in business activity, albeit at a slower pace than in January, but activity in peripheral euro zone nation’s showed a steep decline this month.
A separate report showed that new industrial orders across the euro zone increased by 1.8% in December, erasing the previous month’s 1.1% drop.
Elsewhere, the euro was trading close to a two-month high against the pound, with EUR/GBP adding 0.57% to hit 0.8433.
Sterling weakened broadly after the minutes of the Bank of England’s February meeting showed that two policymakers supported a GBP75 billion increase to the size of the bank’s asset purchase program, while the remainder of the monetary policy committee voted in favor of a GBP50 billion increase to GBP325 billion.
The majority of policymakers believed that an increase of more than GBP50 billion “risked sending a signal that the Committee thought the economic situation was weaker than it was.”
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