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Forex - EUR/USD remains higher, UoM report caps gains

Published 12/12/2014, 10:02 AM
Euro holds gains vs. dollar after U.S. data
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EUR/GBP
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Investing.com - The euro remained higher against the U.S. dollar on Friday, as euro zone industrial production data lent support, although gains were capped by a strong preliminary report on U.S. consumer sentiment.

EUR/USD hit 1.2495 during U.S. morning trade, the session high; the pair subsequently consolidated at 1.2444, rising 0.28%.

The pair was likely to find support at 1.2360, the low of December 10 and resistance at 1.2507, the high of December 1.

The euro strengthened earlier, after data showed that industrial production in the euro zome rose 0.1% in October, in line with expectations, after a 0.5% increase in September, whose figure was revised from a previously estimated 0.6% gain.

Year-on-year, the bloc's industrial production increased 0.7% in October, compared to expectations for a 0.5% rise, after a revised 0.2% uptick in September.

In the U.S., the University of Michigan said in a preliminary report that its consumer sentiment index rose to a nearly eight-year high of 93.8 this month from 88.8 in November. Analysts had expected the index to rise to 89.7 in December.

The data came after the U.S. Department of Labor reported that producer price inflation fell 0.2% last month, compared to expectations for a 0.1% downtick, after a 0.2% rise in October.

Core producer price inflation, which excludes food, energy and trade, was flat in November, confounding expectations for a 0.1% rise, after an increase of 0.4% the previous month.

The dollar also remained supported after strong retail sales numbers on Thursday boosted expectations for the Federal Reserve to hike interest rates earlier in 2015 than once anticipated, possibly in the middle of the year.

The euro was also higher against the pound, with EUR/GBP gaining 0.34% to 0.7915.

Also Friday, the U.K. Office for National Statistics said construction output declined 2.2% in October, disappointing expectations for a 0.8% rise.

Construction output rose 2.2% in September, whose figure was revised from a previously estimated 1.8% gain.

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