European currency pared down advance against greenback after release of mixed Eurozone PMI, though sentiment on US Dollar remained fragile on the eve of FED Janet Yellen speech on Friday. EURUSD pair retreated from 1.1355 level, Tuesday session high, slowing down decline near Monday close at 1.1320. The pair’s support and resistance is seen at 1.1268 – 1.1370 levels.
Earlier on Tuesday, research group Markit reported that its gauge of business activity in the manufacturing sector in Germany rose in August to 53.6 from 53.8 in the previous month, breaking expectations for a decline to 53.5 points. Services PMI in Germany fell to 53.3 this month from 54.4 in July, while analysts’ consensus predicted the gauge will remain unchanged.
Markit also reported that the index of business activity in the manufacturing sector in France dropped in August to 48.5 from 48.6 last month, compared with growth expectations to 48.8. Business activity in service sector in France rose this month to 52.0 from 50.5 in July, beating expectations which anticipated no change in the index.
For the entire eurozone, the preliminary value of the composite index of business activity, which combines activity in the manufacturing and services sectors, rose to 53.3 in August from 53.2 in July. The indicator climbed to the seven-month high, while analysts expected a drop to 53.1 points.
Meanwhile, the dollar remains under pressure as investors keep reduced bets on US currency on the eve of speech of the Chairman of the Federal Reserve Janet Yellen on Friday which is expected to make fresh signals on the timing of the next interest rate increase in the United States.
The US dollar generally strengthened after the Federal Reserve Bank president on San Francisco John Williams last week gave a hint of a rate hike in September.
The euro fell against the pound, with EUR / GBP pair losing 0.26% to 0.8596.