Investing.com - The euro fell to two-and-a-half month lows against the broadly stronger dollar on Friday, as strong U.S. data fuelled expectations for an early end to the Federal Reserve’s easing program.
The euro fell below 1.30 against the dollar for the first time since December 11, with EUR/USD hitting a session low of 1.2967, before settling at 1.3018, down 0.29% for the day and 0.38% lower for the week.
The pair is likely to find support at 1.2928, the low of December 11 and resistance at 1.3100, Friday’s high.
The dollar strengthened broadly on Friday after data showed that the U.S. manufacturing sector expanded at its fastest pace since June 2011 last month, while a separate report showed that U.S. consumer confidence rose in February.
The Institute for Supply Management said its manufacturing PMI rose to 54.2 from 53.1 in January, while the final reading of the University of Michigan’s consumer sentiment index came in at 77.6, from a preliminary reading of 76.3.
The dollar also found support amid worries over U.S. spending cuts, known as the sequester, after lawmakers failed to reach an agreement on a deficit reduction plan.
In the euro zone, revised data showed that manufacturing activity in the region contracted in February at the same pace as in January, with the manufacturing PMI unchanged at 47.8.
The weak data added to speculation over a possible rate cut by the European Central Bank at its upcoming policy meeting on Thursday.
A separate report showed that the unemployment rate in the bloc rose to a record 11.9% in January.
The single currency also remained under pressure amid concerns that that Italy would not be able to continue to implement structural reforms and austerity measures following inconclusive election results.
In the week ahead, markets will be focusing on the outcome of Thursday’s ECB policy setting meeting. In addition, Friday’s data on U.S. nonfarm payrolls will be closely watched as investors attempt to gauge the strength of the economic recovery.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, March 4
In the euro zone, Spain is to release government data on the change in the number of people unemployed.
Tuesday, March 5
The euro zone is to release final data on service sector activity, while Span and Italy are to release individual reports. The bloc is also to produce official data on retail sales.
In the U.S., the ISM is to release a report on service sector activity, a leading indicator of economic health.
Wednesday, March 6
The euro zone is to release revised data on fourth quarter gross domestic product.
The U.S. is to publish data on ADP nonfarm payrolls, which leads government data on nonfarm payrolls by two days. The U.S. is also to release official data on factory orders and crude oil stockpiles.
Thursday, March 7
The ECB is to announce its benchmark interest rate; the announcement is to be followed by a post-policy meeting press conference with President Mario Draghi.
Germany is to produce official data on factory orders, a leading economic indicator.
The U.S. is to publish the weekly government report on initial jobless claims and official data on the trade balance.
Friday, March 8
Germany is to release official data on industrial production, a leading economic indicator.
The U.S. is to round up the week with government data on nonfarm payrolls and the unemployment rate and data on average hourly earnings.
The euro fell below 1.30 against the dollar for the first time since December 11, with EUR/USD hitting a session low of 1.2967, before settling at 1.3018, down 0.29% for the day and 0.38% lower for the week.
The pair is likely to find support at 1.2928, the low of December 11 and resistance at 1.3100, Friday’s high.
The dollar strengthened broadly on Friday after data showed that the U.S. manufacturing sector expanded at its fastest pace since June 2011 last month, while a separate report showed that U.S. consumer confidence rose in February.
The Institute for Supply Management said its manufacturing PMI rose to 54.2 from 53.1 in January, while the final reading of the University of Michigan’s consumer sentiment index came in at 77.6, from a preliminary reading of 76.3.
The dollar also found support amid worries over U.S. spending cuts, known as the sequester, after lawmakers failed to reach an agreement on a deficit reduction plan.
In the euro zone, revised data showed that manufacturing activity in the region contracted in February at the same pace as in January, with the manufacturing PMI unchanged at 47.8.
The weak data added to speculation over a possible rate cut by the European Central Bank at its upcoming policy meeting on Thursday.
A separate report showed that the unemployment rate in the bloc rose to a record 11.9% in January.
The single currency also remained under pressure amid concerns that that Italy would not be able to continue to implement structural reforms and austerity measures following inconclusive election results.
In the week ahead, markets will be focusing on the outcome of Thursday’s ECB policy setting meeting. In addition, Friday’s data on U.S. nonfarm payrolls will be closely watched as investors attempt to gauge the strength of the economic recovery.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, March 4
In the euro zone, Spain is to release government data on the change in the number of people unemployed.
Tuesday, March 5
The euro zone is to release final data on service sector activity, while Span and Italy are to release individual reports. The bloc is also to produce official data on retail sales.
In the U.S., the ISM is to release a report on service sector activity, a leading indicator of economic health.
Wednesday, March 6
The euro zone is to release revised data on fourth quarter gross domestic product.
The U.S. is to publish data on ADP nonfarm payrolls, which leads government data on nonfarm payrolls by two days. The U.S. is also to release official data on factory orders and crude oil stockpiles.
Thursday, March 7
The ECB is to announce its benchmark interest rate; the announcement is to be followed by a post-policy meeting press conference with President Mario Draghi.
Germany is to produce official data on factory orders, a leading economic indicator.
The U.S. is to publish the weekly government report on initial jobless claims and official data on the trade balance.
Friday, March 8
Germany is to release official data on industrial production, a leading economic indicator.
The U.S. is to round up the week with government data on nonfarm payrolls and the unemployment rate and data on average hourly earnings.