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Forex - EUR/USD remains near 1-week highs, gains capped

Published 11/15/2013, 10:01 AM
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Investing.com - The euro remained near one-week highs against the U.S. dollar on Friday, as the release of weak U.S. data weighed on demand for the greenback, although concerns over the strength of the economic recovery in the euro zone limited the euro's gains.

EUR/USD hit 1.3505 during U.S. morning trade, the pair's highest since November 7; the pair subsequently consolidated at 1.3491, adding 0.25%.

The pair was likely to find support at 1.3391, the low of November 13 and resistance at 1.3581, the high of November 1.

In a report, the Federal Reserve of New York said its maufacturing activity index declined to minus 2.2 in November, from a reading of 1.5 the previous month, confounding expectations for a rise to 5.

A separate report showed that U.S. import prices fell 0.7% in October, compared to expectations for a 0.4% downtick, after a downwardly revised 0.1% rise the previous month.

In addition, official data showed that industrial production in the U.S. ticked down 0.1% in October, disappointing expectations for a 0.2% rise, after an upwardly revised 0.7% increase in September.

The data came after Federal Reserve Chair nominee Janet Yellen on Thursday defended the central bank's stimulus measures to bolster growth and called efforts to boost hiring an "imperative".

Answering questions before the Senate Banking Committee, Yellen said she would press forward with the central bank's ultra-easy monetary policy until officials were confident a durable economic recovery was in place that could sustain job creation.

The comments added to expectations that the Fed's monthly bond purchases may remained unchanged for an extended period of time.

In the euro zone, official data earlier showed that consumer price inflation remained unchanged in October at an annualized rate of 0.7%, in line with expectations.

Core consumer price inflation, which excludes food, energy, alcohol, and tobacco, ticked down to 0.8% from a year earlier, from an upwardly revised rate of 1% in September, in line with market expectations.

Sentiment on the single currency remained fragile after data on Thursday showed that the euro zone economy expanded by 0.1% in the three months to September, slowing from the 0.3% growth achieved in the second quarter when the euro zone exited a recession. Economist had forecast quarter-on-quarter growth of 0.2%.

The euro was fractionally lower against the euro with EUR/GBP easing 0.09%, to hit 0.8368.


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