Investing.com - The dollar was higher against the euro on Friday, amid expectations that the Federal Reserve could start scaling back its economic stimulus program at its upcoming policy meeting this week.
EUR/USD fell to 1.3710, the weakest level since December 9 and was last down 0.09% to 1.3739.
The pair is likely to find support at 1.3675 and resistance at 1.3802, Thursday’s high.
The dollar was boosted after Thursday’s stronger-than-forecast U.S. retail sales data for November added to signs that the economy is improving.
The upbeat data fuelled expectations for a small reduction in the pace of the Fed’s USD85 billion-a-month asset purchase program at its policy meeting scheduled for December 17 - 18.
An agreement on a two-year U.S. budget deal was also seen as removing an obstacle to the winding back of monetary stimulus.
The euro came off session lows after data on Friday showed that U.S. producer price inflation fell 0.1% in November, in line with forecasts.
The soft inflation data did little to alter expectations that the Fed will begin withdrawing stimulus in the next few months after the latest nonfarm payrolls report showed that the U.S. economy added more jobs than expected in November.
Demand for the single currency continued to be underpinned as expectations for further monetary easing by the European Central Bank dimmed after the bank left monetary policy unchanged at its meeting this month, following a surprise rate cut in November.
In the week ahead, investors will be focusing on Wednesday’s outcome of the Fed’s monthly policy meeting, and a press conference with Chairman Ben Bernanke will be closely watched.
The euro zone is to release data on inflation, as well as reports on manufacturing and service sector activity, while the ZEW index of German economic sentiment will be keenly awaited.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, December 16
The euro zone is to publish data on manufacturing and service sector activity, while Germany and France are to publish individual reports. Germany’s central bank is to publish its monthly report.
The U.S. is to release reports on industrial production, manufacturing activity in the New York region and the balance of foreign and domestic investment in U.S. securities.
Tuesday, December 17
The ZEW Institute is to release its closely watched report on German economic sentiment, a leading indicator of economic health. The euro zone is to publish data on consumer inflation.
The U.S. is to release data on consumer inflation and the current account.
Wednesday, December 18
The Ifo Institute is to publish a report on German business climate, a leading indicator of economic health.
The U.S. is to release data on building permits, a leading indicator of future construction activity, and housing starts.
The Federal Reserve is to announce its federal funds rate and publish its rate statement, which outlines economic conditions and the factors affecting the monetary policy decision. The U.S. central bank is also to publish its economic projections for the next two years. The rate announcement is to be followed by a press conference with Chairman Ben Bernanke.
Thursday, December 19
The euro zone is to release data on the current account.
The U.S. is to publish data on existing home sales, manufacturing activity in the Philadelphia region and initial jobless claims.
Friday, December 20
Germany is to release data on producer price inflation, as well as private sector data on consumer climate.
The U.S. is to round up the week with revised data on third quarter GDP.
EUR/USD fell to 1.3710, the weakest level since December 9 and was last down 0.09% to 1.3739.
The pair is likely to find support at 1.3675 and resistance at 1.3802, Thursday’s high.
The dollar was boosted after Thursday’s stronger-than-forecast U.S. retail sales data for November added to signs that the economy is improving.
The upbeat data fuelled expectations for a small reduction in the pace of the Fed’s USD85 billion-a-month asset purchase program at its policy meeting scheduled for December 17 - 18.
An agreement on a two-year U.S. budget deal was also seen as removing an obstacle to the winding back of monetary stimulus.
The euro came off session lows after data on Friday showed that U.S. producer price inflation fell 0.1% in November, in line with forecasts.
The soft inflation data did little to alter expectations that the Fed will begin withdrawing stimulus in the next few months after the latest nonfarm payrolls report showed that the U.S. economy added more jobs than expected in November.
Demand for the single currency continued to be underpinned as expectations for further monetary easing by the European Central Bank dimmed after the bank left monetary policy unchanged at its meeting this month, following a surprise rate cut in November.
In the week ahead, investors will be focusing on Wednesday’s outcome of the Fed’s monthly policy meeting, and a press conference with Chairman Ben Bernanke will be closely watched.
The euro zone is to release data on inflation, as well as reports on manufacturing and service sector activity, while the ZEW index of German economic sentiment will be keenly awaited.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, December 16
The euro zone is to publish data on manufacturing and service sector activity, while Germany and France are to publish individual reports. Germany’s central bank is to publish its monthly report.
The U.S. is to release reports on industrial production, manufacturing activity in the New York region and the balance of foreign and domestic investment in U.S. securities.
Tuesday, December 17
The ZEW Institute is to release its closely watched report on German economic sentiment, a leading indicator of economic health. The euro zone is to publish data on consumer inflation.
The U.S. is to release data on consumer inflation and the current account.
Wednesday, December 18
The Ifo Institute is to publish a report on German business climate, a leading indicator of economic health.
The U.S. is to release data on building permits, a leading indicator of future construction activity, and housing starts.
The Federal Reserve is to announce its federal funds rate and publish its rate statement, which outlines economic conditions and the factors affecting the monetary policy decision. The U.S. central bank is also to publish its economic projections for the next two years. The rate announcement is to be followed by a press conference with Chairman Ben Bernanke.
Thursday, December 19
The euro zone is to release data on the current account.
The U.S. is to publish data on existing home sales, manufacturing activity in the Philadelphia region and initial jobless claims.
Friday, December 20
Germany is to release data on producer price inflation, as well as private sector data on consumer climate.
The U.S. is to round up the week with revised data on third quarter GDP.