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Forex - EUR/USD edges higher after string of data but gains capped

Published 01/30/2015, 07:18 AM
Euro moves slightly higher vs. dollar after batch of euro zone reports
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Investing.com - The euro edged higher against the U.S. dollar on Friday, after positive euro zone unemployment data and upbeat reports from France and Spain, although gains remained limited by concerns over Greece's future in the single currency bloc.

EUR/USD hit 1.13464 during European afternoon trade, the session high; the pair subsequently consolidated at 1.1339, adding 0.18%.

The pair was likely to find support at 1.1223, the high of January 27 and resistance at 1.1421, the high of January 27.

Eurostat reported that the euro zone’s unemployment rate ticked down to 11.4% in December from 11.5% the previous month, confounding expectations for the rate to remain unchanged.

In a separate report, Eurostat said that the annual rate of euro zone inflation fell by 0.6% in January, after a 0.2% slip in December. Economists had expected an annual decline of 0.5%.

Core inflation, which strips out volatile measures such as food and energy costs, rose 0.5% on a year-over-year basis, but was still well below the European Central Bank's target of close to, but just under 2%.

Earlier Friday, official data showed that French consumer spending increased by 1.5% in December, exceeding expectations for a 0.2% rise. November's figure was revised to a 0.2% gain from a previously estimated 0.4% advance.

Data also showed that Spanish gross domestic product rose 0.7% in the fourth quarter of 2014, above expectations for a 0.6% gain, up from a growth rate of 0.5% in the previous quarter.

A separate report showed that German retail sales gained 0.2% last month, disappointing expectations for a 0.3% rise. November's figure was revised to a 0.9% increase from a previously estimated 1.0% climb.

Sentiment on the euro remained vulnerable after Greece's new government moved Wednesday to roll back deeply unpopular austerity policies underpinning the county’s €240 billion international bailout, fuelling fears over a clash with its international creditors.

The euro was also higher against the pound, with EUR/GBP edging up 0.12% to 0.7521.

In the U.K., data showed that U.K. net lending to individuals fell to £2.2 billion in December from a revised £3.1 billion in November.

Data also showed that U.K. mortgage approvals rose by 60,280 last month after a downwardly revised 58,960 increase in November, compared to expectations for a 59,000 rise.

In addition, the U.K. Gfk consumer confidence index improved to 1 this month from minus 4 in December, compared to expectations for a reading of minus 2.

Later in the day, the U.S. was to release preliminary data on fourth quarter growth as well as reports on business activity in the Chicago region and revised data on consumer sentiment.

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