Forex - EUR/USD drops on U.S. consumer data, European output report
Published Jul 12, 2013 11:22AM ET
In U.S. trading on Friday, EUR/USD was down 0.32% at 1.3054, up from a session low of 1.3000 and off from a high of 1.3100.
The pair was likely to find support at 1.2755, Tuesday's low, and resistance at 1.3206, Wednesday's high.
Euro zone industrial production fell 0.3% in May, according to official data, surpassing market calls for a 0.2% decline after a 0.5% increase the previous month.
The numbers pressured the euro lower, as the European Central Bank has suggested that interest rates may remain at their currently low levels or possible fall even further.
Meanwhile in the U.S. the preliminary Thomson Reuters/University of Michigan consumer sentiment index fell to 83.9 in July from 84.1 in June, defying expectations for a rise to 85.0.
Separately, the U.S. Department of Labor said producer price inflation rose 0.8% in June, beating expectations for a 0.5% gain and above a 0.5% increase the previous month.
The core producer price index, which excludes food and energy, rose 0.2% last month compared to expectations for a 0.1% increase, beating a 0.1% rise in May.
Federal Reserve Chairman Ben Bernanke said this week that stimulus programs will remain in place for the foreseeable future, which weakened the greenback though the currency regained strength on Friday after investors priced in loose monetary policy into trading.
The Fed is currently buying USD85 billion in assets a month to keep interest rates low, which weakens the dollar, though investors took up dollar positions on Friday on sentiments that such stimulus programs will begin to taper eventually.
The euro, meanwhile, was up against the pound and up against the yen, with EUR/GBP trading up 0.12% at 0.8634 and EUR/JPY trading up 0.07% at 129.68.
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Written By: Investing.com
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