07, August 2013

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

The dollar was being traded against the most major currencies on Monday amid uncertainty over the fate of U.S. stimulus programs. Better-than-expected U.S. economic indicators reinforce dollar, fanning expectations that the Federal Reserve will start narrowing incentive programs, such as monthly asset purchases by 85 billion USD to stimulate economic recovery, which weaken the dollar, although uncertainty over the timing of those steps negatively affect the U.S. dollar.

During the U.S. session on Monday, EUR/USD was down 0.13% to 1.3262. The Institute for Supply Management said earlier that the index of purchasing managers in the non-manufacturing sector rose to 56.0 in July from 52.2 three-year low in June. Analysts had expected the index to rise to 53.0. The increase in new orders rose to 57.7 from 50.8 in June.

The value of more than 50 indicates expansion. Meanwhile in Europe, the data showed that the euro zone services purchasing managers index rose to 49.8 in July, ahead of forecast 49 .. Eurostat also reported that retail sales fell 0.5% in June, slightly better than market forecasts - 0.6%. The dollar, meanwhile, fell against the pound, with GBP/USD was trading up 0.42% at 1.5356. London-based Markit Economics, said earlier that the UK services purchasing managers index rose to 60.2 from 56.9 in June, well above economists' expectations of 57.2. This will strengthen the pound against the dollar.