Forex - EUR/USD drops as eurozone jobs data misses expectations

The euro softened against the dollar on Tuesday, briefly approaching 4-month lows after data revealed that the eurozone unemployment rate hit an all-time high in February.

In U.S. trading on Tuesday, EUR/USD was down 0.11% at 1.2836, up from a session low of 1.2812 and off from a high of 1.2877.

The pair was likely to find support at 1.2772, Monday's low, and resistance at 1.3048, the high from March 25.

The eurozone unemployment rate hit an all-time high of 12% in February, up from January's original 11.9% reading, which was revised up to 12%.

The numbers sparked safe-haven demand for dollar as did eurozone factory data.

The eurozone’s manufacturing purchasing managers’ index hit 46.8 in March, according to Markit Economics, up from a final reading of 46.6 in February but still below the 50 mark that separates growth from contraction.

The manufacturing PMI in Germany, Europe's economic engine, came to 49.0 in March from a final reading of 48.9 in February, which gave the euro some support.

Across the Atlantic in the U.S., factory orders rose by 3.0% in February, above expectations for an increase of 2.9%, according to the Census Bureau.

The numbers supported the greenback.

Many market participants remained on the sidelines ahead of the European Central Bank’s upcoming policy meeting on Thursday.

While no changes to monetary policy are expected, many remained in wait-and-see mode ahead of ECB President Mario Draghi's press conference that will take place when the policy meeting concludes.

The euro, meanwhile, was up against the pound and up against the yen, with EUR/GBP trading up 0.62% at 0.8488, and EUR/JPY trading up 0.09% at 119.92.

On Wednesday, the eurozone is preliminary inflation data.

In the U.S., payroll processor ADP will release its monthly report on private-sector nonfarm payrolls, often a precursor to the official jobs report due for release on Friday. 

The U.S. is also to produce official data on crude oil stockpiles, while the ISM is to release a report on service-sector activity, a leading indicator of economic health.

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