Investing.com -- EUR/USD inched up on Thursday halting a four-day skid, as the timing of an interest rate hike by the Federal Reserve and the prospect of a Greek default on its sovereign debt remained in focus.
The pair gained .0017 or 0.15% to 1.115, trading in a tight range of 1.1081 and 1.1181. One session earlier, the euro fell below 1.11 against the dollar for the first time in the month of May. EUR/USD opened the week at 1.1447. EUR/USD likely gained support at 1.1070 the low from April 30 and was met with resistance at 1.1326 the high from May 19.
On Thursday night, European leaders convened in Latvia for a two-day summit in Riga. Greece prime minister Alexis Tsipras, Germany chancellor Angela Merkel and France president Francois Hollande were expected to discuss a potential extension to the euro zone's bailout to Greece, according to reports. Currency traders reacted to disappointing economic on both continents Thursday, on a day of choppy trading.
In Europe, Markit's Services PMI fell sharply from 54.1 last month to 53.3 in May. Analysts had predicted a reading of 53.9. Markit's euro zone Manufacturing PMI index inched up from 52.0 to 52.3, but its Composite index fell to 53.4 from a reading of 53.9 in April.
In the U.S., new jobless claims inched up last week by 10,000 to 274,000, after the figure remained in the 260,000 range over the previous three weeks. Still, the four-week average fell by 5,500 too 266,250, moving lower for the fourth straight week. By comparison, the four-week average peaked above 285,000 in mid-April. Continuing claims, meanwhile, declined by 12,000 to 2.21 million for the week ending May 9, nearing a 15-year low.
When the Federal Open Market Committee released the minutes from its April meeting on Wednesday, the majority of its members did not support a June interest rate, according to the minutes. The Fed reiterated that it will take a "data-driven" approach to its when it is reasonably confident it has seen significant improvements in the economy. The Fed blamed weak first quarter GDP growth on "largely transitory factors" such as severe winter weather and a West Coast port slowdown that dented exports. Historically, economic growth has been comparatively weak in the first quarter in recent years, the FOMC added.
Investors await the release of Friday's Consumer Price Index for more hints on the Fed's next move. In April, the FOMC said consumer price inflation continued to fall below its long-term targeted goal of 2%. Medium-term forecasts for inflation, which the Fed generally defines as the next two years, projected to "move closer but remained" below the FOMC's 2% goal. Economists expect the CPI to increase modestly for April on a monthly basis by 0.1%.
Yields on 10-year government bonds in Europe were relatively unchanged ahead of the meeting in Riga. German 10-Year bunds increased modestly on Thursday by one basis point to 0.64%. Yields on 10-year German bunds are up by more than 50 basis points on the month.
By comparison, the yield on U.S. 10-Year Treasuries fell more than five basis points on the session to 2.195%. Yields on U.S. 30-Year dropped by six basis points to 2.991%.