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Forex - EUR/USD almost unchanged after Fed decision, U.S. data

Published 12/13/2012, 10:23 AM
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Investing.com - The euro was almost unchanged against the U.S. dollar on Thursday, after the Federal Reserve announced a fresh round of easing measures and following the release of mixed U.S. economic data.

EUR/USD hit 1.3100 during U.S. morning trade, the session high; the pair subsequently consolidated at 1.3082, inching up 0.07%.

The pair was likely to find support at 1.3054, the session low and near-term resistance at 1.3125, the high of December 5 and a five-week high.

The greenback showed little reaction after the U.S. Department of Labor said the number of people filing for initial jobless benefits fell by 29,000 to 343,000 last week, against expectations for a decline of 2,000.

The previous week’s figure was revised up to 372,000 from a previously reported 370,000.

Separately, the Commerce Department said U.S. retail sales rose 0.3% in November, missing expectations for a 0.5% increase.

Meanwhile, official data showed that producer price inflation in the U.S. fell 0.8% last month, compared to forecasts for a 0.5% decline.

The U.S. central bank said Wednesday that it would continue to purchase USD85 billion a month of government bonds and mortgage based securities in order to shore up the economic recovery.

The Fed also said that interest rates would remain close to zero as long as inflation forecasts remain near the bank’s 2% target and until the U.S. unemployment rate declines to 6.5% or less.

Investor focus shifted back to negotiations to avoid the U.S. fiscal cliff following the central bank announcement, amid concerns that the automatic tax hikes and spending cuts due to take effect in early 2013 could derail the U.S. recovery.

The euro was higher against the pound, with EUR/GBP rising 0.22% to 0.8133 and was trading close to multi-month highs against the yen, with EUR/JPY up 0.52% to 109.42.

In the euro zone, finance ministers agreed a deal on rules for supervising the bloc’s banks on Thursday.

Ministers also released EUR49.1 billion of financial aid for Greece, after the country completed a scheme to buy back its debt from private investors this week.



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