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EUR/USD gains on soft U.S. consumer sentiment data

Published 03/14/2014, 12:30 PM
Updated 03/14/2014, 12:31 PM
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Investing.com - The euro rose against the dollar on Friday after a widely-watched gauge of consumer sentiment missed expectations.

In U.S. trading, EUR/USD was up 0.30% at 1.3909, up from a session low of 1.3847 and off a high of 1.3936.

The pair was likely to find support at 1.3834, Tuesday's low, and resistance at 1.4169, the high from Oct. 31, 2011.

The Thomson Reuters/University of Michigan preliminary consumer sentiment index fell to 79.9 for March, from 81.6 in February, defying market expectations for a rise to 82.0.

Also on Friday, data revealed that the U.S. producer price index fell 0.1% in February, confounding expectations for a 0.2% rise, after a 0.2% increase the previous month.

Core producer price inflation, which excludes food, energy and trade, slipped 0.2% last month, compared to expectations for a 0.1% rise, after a 0.2% gain in January.

Friday's data reminded investors that the Federal Reserve will take its time dismantling its monthly bond-buying program, which weakens the dollar as long as it remains in effect.

Meanwhile, investors remained cautious after Russia launched new military exercises near its border with Ukraine on Thursday, showing no sign of backing down on plans to annex Crimea.

U.S. Secretary of State John Kerry said the U.S. and Europe should take steps if a referendum on Crimea joining Russia takes place on Sunday as planned.

Kerry was set to meet with his Russian counterpart Sergei Lavrov on Friday in a last attempt to defuse tension between Moscow and the West.

Markets remained on edge after data on Thursday showed that Chinese industrial production rose 8.6% in the first two months of 2014, missing market expectations for an increase of 9.5%, while Chinese retail sales rose by a smaller-than-forecast 11.8% in the same period.

Meanwhile in Europe, Germany's monthly inflation rate came in at 0.5% in February and 1.2% on year, both figures in line with market expectations.

Also in Europe, the European Union's statistical arm Eurostat reported earlier that the number of employed individuals rose 0.1% in the fourth quarter of last year, beating  market expectations for an unchanged reading.

The euro was up against the pound, with EUR/GBP up 0.34% to 0.8372, and down against the yen, with EUR/JPY down 0.09% and trading at 141.07.

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