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Forex - EUR/USD falls to 2-week low on downbeat E.Z. outlook

Published 12/07/2012, 10:48 AM
Updated 12/07/2012, 10:49 AM
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Investing.com - The euro fell to a two-week low against the U.S. dollar on Friday, after the release of mixed U.S. economic data, as renewed concerns over the worsening of the debt crisis in the euro zone weighed on demand for the single currency.

EUR/USD hit 1.2880 during U.S. morning trade, the pair's lowest since November 23; the pair subsequently consolidated at 1.2935, falling 0.26%.

The pair was likely to find support at 1.2869, the low of November 23 and resistance at 1.2973, the session high.

The University of Michigan said that its index of consumer sentiment fell to a seasonally adjusted 74.5 in December from a reading of 82.7 the previous month.

Analysts had expected the index to fall to 82.4 this month.

Separately, the U.S. Department of Labor said the economy added 146,000 jobs in November, after a downwardly revised 138,000 increase the previous month, beating expectations for a 93,000 rise.

The report also showed that the U.S. unemployment rate ticked down to 7.5% in November from 7.9% the previous month, beating expectations for the rate to remain unchanged.

Meanwhile, sentiment on the euro remained fragile after the Bundesbank cut its 2013 growth projection to 0.4% from the 1.6% predicted in June and said the German economy will grow 0.7% this year, down from its previous forecast of 1%.

The announcement came after European Central Bank President Mario Draghi on Thursday said that risks to the outlook remain weighted to the downside. 

In addition, official data showed that industrial production in Germany dropped 2.6% in October, far more than the expected 0.2% fall, following a 1.3% decline the previous month.

The euro was fractionally lower against the pound with EUR/GBP inching down 0.09%, to hit 0.8071.

Also Friday, official data showed that manufacturing production in the U.K. dropped 1.3% in October, far more than the expected 0.2% fall, after a 0.1% rise the previous month.

Industrial production in the U.K. declined unexpectedly in October, falling 0.8% after a 2.1% drop the previous month. Analysts had expected industrial production to rise 0.7% in October.


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