Forex - EUR/USD slightly lower ahead of ECB meeting

The euro traded modestly lower against the U.S. dollar during Thursday’s Asian session ahead of the European Central Bank meeting later Thursday. 

In Asian trading Thursday, EUR/USD fell 0.12% to 1.2996. The pair was likely to find support at 1.2900 and resistance at 1.3056, the high of June 27. 

During Wednesday’s Asian session, EUR/USD hit 1.2961 during late Asian trade, the pair’s lowest since June 3; the pair subsequently consolidated at 1.2974, dipping 0.03%. 

On Wed, official data showed that euro zone retail sales rose 1% in May, outstripping expectations for a 0.2% gain.

In addition, revised data showed that the euro zone services PMI ticked up to 48.3 in June from a final reading of 47.2 in May. 

The European Central Bank meets later Thursday and while ECB President Mario Draghi was expected to reiterate that an exit from loose monetary policy remains distant, traders will also be listening for what Draghi has to say about the situation in Portugal. 

Yields on Portuguese sovereign debt spiked this week after two of the nation’s financial ministers resigned. Yields on Portuguese 10-years hit 8% for the first time since November. Most economists expect the ECB to keep its benchmark interest rate at 0.5%. 

Solid U.S. economic news also weighed on the common currency. In U.S. economic news out Wednesday, weekly jobless claims fell 5,000 to a seasonally adjusted 343,000 last week. The less volatile four-week moving average dropped by 750 to 345,500, according to the U.S. Labor Department. 

Payroll provider ADP said private employers added 188,000 new jobs last month. Heavy gains were seen in construction and small-business. The Labor Department delivers the June jobs report Friday before the open of U.S. markets. 

The Institute for Supply Management said its services index fell to 52.2 last month from 53.7 in May. Economists expected a June reading of 54. 

Elsewhere, EUR/JPY fell 0.15% to 1.2980 while EUR/AUD inched down 0.01% to 1.4314.