Euro holds gains amid positive data ahead of ECB rate decision

Euro hovered near the previous day's highs on Wednesday (3 June) helped by better than expected data from the region even as the market awaited European Central Bank's rate decision scheduled for the day.

The market confidence was also being boosted by optimism that Greece will be able to reach a deal with its creditors so that a default scenario would be averted.

EUR/USD traded in a range of 1.1103-1.1191 on Wednesday compared to Tuesday's close of 1.1151 and the intra-day high of 1.1194, which was a 10-day high.

The pair is now testing the 1.1200 region and the next level to watch out for is 1.1300 ahead of 1.1468, the May peak which was a three-month high.

The consensus for the ECB rate setting meeting is for no change in the rates, but the market will be looking forward to the press meeting by the central bank president Mario Draghi, where he is likely to face questions on Greece.

French services PMI rose to 52.8 in May from 51.6 in April, data showed earlier in the day. German index rose to 53.0 from 52.9 while the consensus was for a repeat.

Eurozone services PMI rose to 53.8 from 53.3 even as market forecast was a hold at 53.3.

Italian unemployment rate slipped to 12.4% from 12.6% against the consensus of 12.8%. Also the April reading was a revision from 13.0%. Eurozone jobless rate also improved in May, to 11.1% from 11.2% when the market was expecting a repeat. There too the April rate was a revision from 11.3%.

The other data surprise was the region's retail sales figures for April. The sales growth increased to 2.2% from 1.7% when the consensus was for 2% growth.