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Forex - EUR/USD edges up but gains capped after U.S. jobless claims

Published 08/21/2014, 08:42 AM
Updated 08/21/2014, 08:42 AM
Euro moves slightly higher vs. dollar but upside seen limited

Investing.com - The euro edged up against the U.S. dollar on Thursday, but still remained close to 11-month lows after the release of upbeat U.S. jobless claims data and as disappointing manufacturing and service sector reports from the euro zone continued to weigh.

EUR/USD hit 1.3278 during European afternoon trade, the session high; the pair subsequently consolidated at 1.3269, edging up 0.08%.

The pair was likely to find support at 1.3105 and resistance at 1.3322, Wednesday's high.

In a report, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending August 16 decreased by 14,000 to 298,000 from the previous week’s revised total of 312,000.

Analysts had expected jobless claims to fall by 12,000 to 300,000 last week.

The data came a day after the minutes of the Federal Reserve's July meeting showed that some officials believe the strengthening recovery and ongoing improvement in the labor market supports a move towards tightening monetary policy.

Other officials want to see further evidence of economic recovery before moving towards raising rates.

Earlier Thursday, data showed that activity in the euro zone’s manufacturing sector slowed to a 13 month low in August, with the euro zone manufacturing purchasing managers' index down to 50.8 from 51.8 in July. Economists had forecast a decline to 51.3.

The region’s services PMI slid to 53.5 from 54.2 in July, in line with forecasts.

Activity in Germany’s factor sector slowed but remained solid, while manufacturing activity in France contracted for a sixth successive month.

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The euro was fractionally higher against the pound, with EUR/GBP adding 0.09% to 0.7997.

In the U.K., official data showed that retail sales rose 0.1% in July, disappointing expectations for an increase of 0.4%. Retail sales for June were revised to a 0.2% gain from a previously estimated 0.1% rise.

Year-on-year, U.K. retail sales rose 2.6% last month, confounding expectations for a 3.0% increase. For June, retail sales were revised to an annualized 3.4% gain from a previously estimated 3.6% advance.

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