Investing.com - The euro pushed higher against the dollar on Friday after data showed that the U.S. economy added fewer-than-expected jobs in July, but gains were held in check amid concerns over the subdued inflation outlook for the euro area.
EUR/USD was up 0.29% to 1.3429 late Friday, off Wednesday’s eight-month trough of 1.3366.
The Labor Department reported that that U.S. economy added 209,000 jobs in July, below forecasts for jobs growth of 233,000. The previous month’s figure was revised up to a gain of 298,000 from a previously reported increase of 288,000.
Although it was the sixth successive month that the U.S. economy added more than 200,000 jobs, the unemployment rate unexpectedly ticked up to 6.2% from 6.1% in June. In addition, wage growth was flat, pointing to underlying slack in the economy.
The data prompted investors to trim back expectations on the timing of a possible rate hike by the Federal Reserve, sending the dollar lower.
The greenback had rallied earlier in the week, as strong economic data underlined the view that the recovery is gaining momentum. Official data on Wednesday showed that U.S. GDP expanded at an annual rate of 4.0% in the three months to June, outstripping forecasts of 3.0%.
The Fed also upgraded its view on the economy on Wednesday, but reiterated that considerable slack still remains in the labor market.
The euro remained under pressure after data on Thursday showed that the annual rate of inflation in the euro zone slowed to 0.4% in July from 0.5% in June. The European Central Bank targets an inflation rate of close to but just under 2%.
The poor data added to pressure on the ECB to implement further stimulus measures to shore up growth and stave off the threat of deflation in the currency bloc.
In the week ahead, investors will be focusing on the outcome of Thursday’s ECB policy meeting, while Tuesday’s report on U.S. service sector activity will also be in focus.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, August 4
In the euro zone, Spain is to produce a report on the change in the number of people employed.
Tuesday, August 5
The euro zone is to release data on retail sales, while Spain and Italy are to produce reports on service sector activity.
Later Tuesday, the U.S. is to publish data on factory orders, while the Institute of Supply Management is to release data on service sector growth.
Wednesday, August 6
Germany is to publish a report on factory orders.
The U.S. is to publish data on the trade balance.
Thursday, August 7
The ECB is to announce its benchmark interest rate. The announcement is to be followed by a press conference with President Mario Draghi.
The U.S. is to publish the weekly report on initial jobless claims.
Friday, August 8
In the euro zone, France is to publish data on industrial production, while Germany is to publish a report on its trade balance.