Forex News - The euro moved lower against the U.S. dollar in Asian trade Thursday, following a better than expected U.S. labor release, and reports that European finance officials were moving to ease the effects of a potential Greek default.
EUR/USD hit 1.3336 in early Asian trade, the pair’s lowest since Tuesday; the pair subsequently consolidated at 1.3353, falling 0.04%.
The pair was likely to find support at 1.3089, the low of January 13, and resistance at 1.3369, Monday’s high.
Earlier Wednesday, the Financial Times reported that European bank regulators will conduct a new round of evaluations on regional banks, in an attempt to avert a shock to the region’s financial system if Greece defaults.
German Chancellor Angela Merkel said that Europe’s rescue fund would only be used as a last resort to save banks and that investors may have to endure more losses as part of a Greek bailout.
“If a country cannot do it using its own resources and the stability of the euro as a whole is put at risk because the country has difficulties, then there’s the possibility of using the EFSF (European Financial Stability Facility), Merkel said after meeting with European Commission President Jose Barroso in Brussels.
Moody’s investor service late Tuesday, cut Italy’s credit rating for the first time in nearly two decades, from AA2 to A2, citing weak growth as an impediment to Italy’s ability to reduce its debt, the second largest in the euro-zone.
Elsewhere Wednesday, U.S. Institute of Supply Management reported that its non-manufacturing purchasing manager’s index slipped by 0.3 points to 53 in September, down slightly from 53.3 in August, and broadly in line with market expectations.
On the ISM’s index, any number above 50 indicates expansion while a figure below 50 is a sign of contraction.
Meanwhile, payroll processing firm ADP said that the U.S. economy added 91,000 non-farm jobs in September, a slight gain from a revised 89,000 the previous month, and above market expectations of a 70,000 increase.
The ADP report also noted that employment in the service sector gained 90,000 in September, the 21st consecutive month of gains.
The encouraging labor numbers lifted Wall Street shares for a second day; The Dow Jones Industrial Average added 1.21% to 10,940, the Nasdaq Composite Index rose 2.32% to 2,460.51, and the S&P 500 was lifted 1.79% to end the day at 1,144.03.
Earlier, European stocks moved forward on hopes for impending action on European debt, with France’s CAC jumping 4.33% to 2,973.90, Britain’s FTSE 100 rose 3.19% to 5,102.17, while Germany’s DAX was higher by 4.91% to 5,473.03.
Meanwhile, the euro was lower against both the British pound and the Japanese yen, with EUR/GBP down 0.06% to hit 0.8627, and EUR/JPY lower by 0.07% to hit 102.41.
The U.S. Department of Labor was due to release its weekly initial jobless claims data later Thursday.
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