Investing.com - The euro moved higher against the dollar on Friday after data showing that U.S. wage growth slowed in the second quarter dampened expectations for a hike in interest rates in the coming months.
The Department of Labor reported that the U.S. employment-cost index, a measure of workers’ wages and benefits, rose just 0.2% in the second quarter. It was the smallest quarterly increase since records began in 1982 and was well below economists’ expectations of a 0.6% increase.
The unexpectedly weak data prompted investors to push back expectations on the timing of an initial rate hike by the Federal Reserve.
The euro rebounded following the data, with EUR/USD rising to 1.0984 in late trade, up 0.47% for the day. For the month the pair lost 1.17%.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, settled at 0.30% to 97.32 late Friday after falling as low as 96.38. The index still ended the month with gains of 1.86%.
The dollar had strengthened earlier in the week after the Federal Reserve indicated that interest rates could rise in the coming months, possibly as early as September, and after data showing U.S. economic growth accelerated in the second quarter.
The U.S. economy expanded at an annual rate of 2.3% in the three months to June the Commerce Department said Thursday. First quarter growth was revised up to 0.6% from a previously reported contraction of 0.2%.
In the euro zone, negotiations between Athens and it creditors on a new €86 billion bailout program continued, amid doubts over whether the bailout plan can help revive the struggling economy.
Athens stock market was due to reopen on Monday following a five-week closure after capital controls were put in place to avoid a financial collapse in Greece.
In the week ahead, investors will be turning their attention to the latest U.S. employment report, which could reinforce expectations for higher interest rates. The euro zone has no major economic data releases scheduled, but investors will be following developments in Greece.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, August 3
The U.S. is to release data on personal income and expenditure.
The Institute of Supply Management is to release data on manufacturing activity.
Tuesday, August 4
The U.S. is to report on factory orders.
Wednesday, August 5
The U.S. is to release the ADP report on private sector hiring, which is to be followed by official data on the trade balance.
Later in the day the ISM is to release data on service sector activity.
Thursday, August 6
Germany is to release data on factory orders.
Friday, August 7
The U.S. is to round up the week with the closely watched government report on nonfarm payrolls.