Investing.com - The euro fell to a two-week low against the U.S. dollar on Friday before bouncing back to settle modestly higher as investors sold the greenback to lock in gains from a rally stemming from the Federal Reserve's decision to trim its USD85 billion a month stimulus program.
EUR/USD fell to 1.3625, the weakest level since December 6, before clawing back to settle 0.07% higher to end at 1.3672. For the week, the pair lost 0.48%.
The pair is likely to find support at 1.3625, Friday’s low and resistance at 1.3810, Wednesday’s high.
Demand for the greenback remained supported after the Fed said Wednesday that it would reduce its USD85 billion-a-month bond buying program by USD10 billion in January, amid indications of an improving U.S. economy.
The U.S. central bank reiterated that interest rates are likely to remain low even after the unemployment rate drops below 6.5%, the threshold at which the Fed has previously said it would start to consider rate increases.
On Friday, the Commerce Department said that the U.S. economy expanded by 4.1% in the third quarter, well above initial estimates for 3.6% growth, adding to signs that the economic recovery is deepening.
Meanwhile, Standard & Poor's cut the European Union's long-term credit ratings to 'AA+' from 'AAA' on Friday, citing concerns that E.U.'s financial profile has deteriorated while cohesion among E.U. members has lessened, though the euro shrugged off the news.
Also on Friday, the Gfk German consumer climate index rose to 7.6 in December from 7.4 in November. Analysts were expecting the index to remain unchanged this month.
A separate report showed that Germany’s producer price index fell 0.1% in November, in line with expectations after a 0.2% decline the previous month.
In the week ahead, the U.S. is to release key reports on durable goods orders, new home sales and jobless claims.
Trading volumes are expected to remain light due to the Christmas holiday and as many traders already closed books before the end of the year, reducing liquidity in the market and increasing the volatility.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, December 23
The U.S. is to produce government data on personal spending and expenditure, while the University of Michigan is to release revised data on consumer sentiment and inflation expectations.
Tuesday, December 24
Markets in Germany will remain closed in observance of Christmas Eve, while France is to release data on consumer spending.
The U.S. is to release data on durable goods orders, a leading indicator of production, as well as a report on new home sales.
Wednesday, December 25
Markets in Europe and the U.S. will remain closed for the Christmas Day holiday.
Thursday, December 26
Markets in Europe will remain closed in observance of Boxing Day.
Meanwhile, the U.S. is to release weekly data on initial jobless claims.
Friday, December 27
The U.S. is to round up the week with a report on crude oil supplies.
EUR/USD fell to 1.3625, the weakest level since December 6, before clawing back to settle 0.07% higher to end at 1.3672. For the week, the pair lost 0.48%.
The pair is likely to find support at 1.3625, Friday’s low and resistance at 1.3810, Wednesday’s high.
Demand for the greenback remained supported after the Fed said Wednesday that it would reduce its USD85 billion-a-month bond buying program by USD10 billion in January, amid indications of an improving U.S. economy.
The U.S. central bank reiterated that interest rates are likely to remain low even after the unemployment rate drops below 6.5%, the threshold at which the Fed has previously said it would start to consider rate increases.
On Friday, the Commerce Department said that the U.S. economy expanded by 4.1% in the third quarter, well above initial estimates for 3.6% growth, adding to signs that the economic recovery is deepening.
Meanwhile, Standard & Poor's cut the European Union's long-term credit ratings to 'AA+' from 'AAA' on Friday, citing concerns that E.U.'s financial profile has deteriorated while cohesion among E.U. members has lessened, though the euro shrugged off the news.
Also on Friday, the Gfk German consumer climate index rose to 7.6 in December from 7.4 in November. Analysts were expecting the index to remain unchanged this month.
A separate report showed that Germany’s producer price index fell 0.1% in November, in line with expectations after a 0.2% decline the previous month.
In the week ahead, the U.S. is to release key reports on durable goods orders, new home sales and jobless claims.
Trading volumes are expected to remain light due to the Christmas holiday and as many traders already closed books before the end of the year, reducing liquidity in the market and increasing the volatility.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, December 23
The U.S. is to produce government data on personal spending and expenditure, while the University of Michigan is to release revised data on consumer sentiment and inflation expectations.
Tuesday, December 24
Markets in Germany will remain closed in observance of Christmas Eve, while France is to release data on consumer spending.
The U.S. is to release data on durable goods orders, a leading indicator of production, as well as a report on new home sales.
Wednesday, December 25
Markets in Europe and the U.S. will remain closed for the Christmas Day holiday.
Thursday, December 26
Markets in Europe will remain closed in observance of Boxing Day.
Meanwhile, the U.S. is to release weekly data on initial jobless claims.
Friday, December 27
The U.S. is to round up the week with a report on crude oil supplies.