EUR/USD hovers close to 1-month lows despite upbeat euro zone data

The euro traded little changed, close to 1-month low against the greenback, despite the upbeat data, coming from the largest euro zone economy, Germany.

Having reached a session low at 1.3611 at 06:25 GMT, EUR/USD lost 0.05% to trade at 1.3621 at 09:50 GMT. Support was likely to be received at January 6th low, 1.3572, also the pairs weakest since December 5th, while resistance was to be met at January 6th high, 1.3653.

The euro was supported, after a report by Destatis revealed the retail sales in the largest euro zone economy, Germany, surged by seasonally adjusted 1.5% in November, outstripping analysts projections of a 0.6% increase. In October the German retail sales declined by 0.8%. The retail sales increased 1.6% in November from a year ago, while in October they decreased by 0.1%.

Separate reports revealed the German unemployment rate remained uncahnged at 6.9% in December, in line with analysts forecasts. In addition, the number of jobless claims in the country declined by 15 000 in December, after they increased by 9 000 in the previous month. Analysts had expected that the number of people who file for unemployment benefits will decrease by mere 2 000.

Yesterday, the euro received support after a report showed the Euro zone SENTIX investor confidence in January rose to the highest level since April 2011. The SENTIX investors’ confidence index, which is based on a survey among 2 400 investors, rose to 11.9 in January from a reading of 8.0 a month ago. Analysts had expected the index to reach 9.5 this month. The data strengthened the Euro zone economic outlook by showing investors in the 18-nation Euro area are most bullish in almost two years.

Meanwhile, the US dollar came under pressure yesterday after a report by the Institute for Supply Management (ISM) revealed that activity in the US sector of services unexpectedly weakened in December. The corresponding non-manufacturing PMI fell to a reading of 53.0 last month from 53.9 in November, short of analysts’ projections of an increase to 54.5.

A separate report by the US Census Bureau showed that nation’s factory orders increased 1.8% in November on a monthly basis, following October’s 0.5% drop, while analysts had anticipated that the indicator will climb 1.7% in November.

Later in the day the United States is to release a report on its trade balance, with the median estimate by experts pointing to a lesser deficit figure, 40.000 billion USD in November, as a month ago nation’s deficit reached 40.641 billion USD.

Elsewhere, having reached a session high at 104.62 at 03:40 GMT, USD/JPY traded at 104.36 at 09:11 GMT, adding 0.13% for the day. On January 2nd the pair touched 105.44, the strongest level since October 2008. Support was likely to be received at January 6th low, 103.92, the lowest since December 23rd, while resistance was to be encountered at January 6th high, 104.95. The pair settled last week 0.3% lower, the first weekly decline in 10 weeks.