AceTraderForex April 3: Euro weakens ahead of ECB rate decision

[B]Market Review[/B] - 02/04/2014 [I]23:06GMT [/I]

[B]Euro weakens ahead of ECB rate decision[/B]

The single currency ended the day lower against the greenback due partly to an increase in U.S. ADP employment together with positions adjustment ahead of Thursday’s ECB rate decision.

Although the single currency traded with a firm undertone in Asia and rose to session high at 1.3820 at European open, renewed selling interest capped euro’s gain and price dropped to 1.3767 in New York morning on dollar’s strength after data showed an increase in U.S. ADP employment change. The pair later dropped to an intra-day low at 1.3753 before recovering.

U.S. ADP employment rose to 191K from previously revised figure of 178K.

Versus the Japanese yen, the greenback resumed its recent ascent and rose to an intra-day high at 103.93 in Asian morning. However, profit-taking there knocked the pair lower and price retreated to session low at 103.58 at New York open before staging a recovery in New York afternoon.

The British pound traded sideways in Asia and rose to session high at 1.6665 in early European morning, however, renewed selling there pressured cable lower and price retreated to 1.6621 in New York morning.

In other news, IMF MD Christine Lagarde said ‘sees emerging risk of low-inflation especially in Eurozone; Eurozone needs more monetary easing, including through unconventional measures; global growth was about 3% last year; global economic recovery is weak n too slow; sees risk of heightened market volatility due to taper of Fed’s monetary easing; need cooperation among central banks, financial regulators to contain policy spillovers.’

On the data front, U.S. factory orders came in better-than-expected at 1.6% versus forecast of 1.2%. Euro zone Feb PPI came in -0.2% m/m and -1.7% y/y, lower than the forecast of 0.0% and -1.6% respectively.

[B]Data to be released on Thursday:[/B]

Australia retail sales, trade balance, China non-manufacturing PMI, HSBC service PMI, Italy service PMI, France service PMI, Germany service PMI, EU service PMI, retail sales, rate decision, U.K. service PMI, Canada trade balance, U.S. trade balance, initial jobless claim, ISM non-manufacturing index.