Investing.com - The euro rose to session highs against the U.S. dollar on Wednesday after a series of weak economic reports indicated that the rate of the U.S. recovery could slow in the fourth quarter.
EUR/USD was up 0.27% to 1.2510, off the lows of 1.2444 struck earlier in the session.
The drop in the dollar came after the Labor Department reported that the number of Americans filing new applications for unemployment benefits rose to 313,000 last week, a gain of 21,000. It was the highest level since early September.
The number of continuing claims fell to a 14-year low of 2.31 million, indicating that the jobs market is still recovering.
At the same time, official data showed that U.S. personal spending rose 0.2% in October, below forecasts for an increase 0.4%. Personal income rose also rose 0.2%, falling short of forecasts of 0.4%.
Another report showed that durable goods orders rose 0.4% last month, compared to expectations for a decline of 0.4%, but core durable goods orders fell 0.9%, against forecasts for a 0.5% gain.
Other reports showed that U.S. consumer sentiment was higher this month, but manufacturing activity in the Chicago region slowed and data from the housing sector was mixed.
The University of Michigan’s consumer sentiment index was revised to 88.8, up from 86.9 in October but below the preliminary estimate of 89.4.
The Chicago purchasing managers’ index fell from 66.2 in October to 60.8 this month, below expectations of a figure of 63.1.
Finally, data showed that sales of new homes rose 0.7% in October to an annual rate of 458,000 units, but pending home sales unexpectedly fell 1.1% last month.
The reports came one day after data showing the U.S. economy posted growth of 3.9% in the last quarter, far higher than the initial estimate of 3.5%.
The single currency’s gains looked likely to be held in check amid heightened expectations that the European Central Bank is moving closer to implementing additional stimulus measures to spur growth and inflation in the euro area.
ECB vice-president Vitor Constancio said Wednesday it could begin quantitative easing as soon as the first quarter of 2015.
The dollar also extended losses against the yen, with USD/JPY sliding 0.33% to 117.56.
The US dollar index, which tracks the performance of the greenback against a basket of six major currencies, was down 0.21% to almost one-week lows of 87.71.