Investing.com - The euro fell to session lows against the dollar on Tuesday as investors remained cautious ahead of Thursday’s European Central Bank meeting and Friday’s keenly awaited U.S. nonfarm payrolls report.
EUR/USD hit 1.3018 during European afternoon trade, the session low; the pair subsequently consolidated at 1.3021, shedding 0.31%.
The pair is likely to find support at 1.2990, the low of June 28 and resistance at 1.3077, the session high.
The single currency came under pressure after Portugal’s Finance Minister Vitor Gaspar resigned late Monday, after recent figures indicated that the country’s budget deficit widened in the first quarter.
The yield on Portugal’s 10-year government bond rose to 6.51% on Tuesday, from 6.4% on Monday.
The ECB was expected to reiterate that an exit from loose monetary policy remains distant at its monthly meeting on Thursday, despite data on Monday indicating that the slump in the euro zone’s manufacturing sector is easing.
The dollar remained supported after stronger U.S. manufacturing data on Monday boosted optimism over the economic outlook.
The Institute for Supply Management said its manufacturing purchasing managers’ index rose to 50.9 in June, recovering from a shock contraction in May.
However, the employment component of the index contracted for the first time since September 2009.
Investors were looking ahead to Friday’s U.S. nonfarm payrolls data, for further clues on when the Fed may decide to unwind its USD85 billion-a-month stimulus program.
The euro was little changed against the pound, with EUR/GBP inching up 0.02% to 0.8584 and was lower against the yen, with EUR/JPY slipping 0.11% to 130.01.
Sterling showed little reaction after data showing that construction activity in the U.K. expanded at the fastest pace since May 2012 in Jun
The U.K. construction purchasing managers' index rose to a seasonally adjusted 51.0 in June from 50.8 in May, slightly below expectations for a reading of 51.1.
The U.S. was to produce official data on factory orders later in the trading day.
