Investing.com - The euro ended the week close to one-month highs against the dollar on Friday after stronger than forecast euro zone inflation data for this month eased concerns that the bloc is slipping into deflation.
EUR/USD ended Friday’s session at 1.3591, slightly below session highs of 1.3622. For the week, the pair gained 0.42%.
The pair is likely to find support at 1.3556, Wednesday’s low and near-term resistance at 1.3645.
Eurostat said the annual rate of consumer inflation accelerated to 0.9% in November, after slumping to a four year low of 0.7% in October. Economists had forecast an annual increase of 0.8%.
The slowdown in euro area inflation in October prompted the European Central Bank to cut rates to a record low 0.25% at its meeting in November.
Another report showed that the euro zone unemployment rate fell to 12.1% in October, down from 12.2% in September, the first fall since February 2011. However, the youth unemployment rate in the region rose to record high of 24.4% in October.
The euro rose to almost five year highs against the yen, with EUR/JPY ending Friday’s session at 139.21, the highest level since June 2009. For the week, the pair gained 1.46%.
The yen remained under heavy selling pressure amid heightened expectations that the Bank of Japan will implement further stimulus measures in order to meet its target of 2% inflation by 2015.
On Wednesday, BoJ board member Sayuri Shirai raised doubts over whether the inflation target can be met because of downside risks to growth, adding that the bank was open to taking further steps if growth slows.
In the week ahead, investors will be focusing on Friday’s U.S. nonfarm payrolls report for November, amid expectations that the Federal Reserve will start to scale back its stimulus program at one of its next few meetings.
Meanwhile, the outcome of Thursday's ECB policy meeting will also be in focus.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, December 2
The euro zone is to release revised data on its manufacturing PMI, while Spain and Italy are also to release individual reports.
Federal Reserve Chairman Ben Bernanke is to speak at an event in Washington. Later Monday, the Institute of Supply Management is to release its manufacturing PMI.
Tuesday, December 3
In the euro zone, Spain is to publish data on the change in the number of people employed.
Wednesday, December 4
The euro zone is to release data on retail sales, while Spain and Italy are to publish their services PMI’s.
The U.S. is to publish a revised estimate of third quarter gross domestic product, the broadest indicator of economic activity and the leading indicator of economic growth. Meanwhile, the Labor Department is to release its weekly report on initial jobless claims. The U.S. is also to publish data on factory orders.
Thursday, December 5
The ECB is to announce its benchmark interest rate. The announcement is to be followed by a press conference with President Mario Draghi.
The U.S. is to publish a revised estimate of third quarter gross domestic product, the broadest indicator of economic activity and the leading indicator of economic growth. Meanwhile, the Labor Department is to release its weekly report on initial jobless claims. The U.S. is also to publish data on factory orders.
Friday, December 6
Germany is to release data on factory orders.
The University of Michigan is to release the preliminary reading of its consumer sentiment index. The U.S. is to round up the week with the closely watched government data on nonfarm payrolls and the unemployment rate.
EUR/USD ended Friday’s session at 1.3591, slightly below session highs of 1.3622. For the week, the pair gained 0.42%.
The pair is likely to find support at 1.3556, Wednesday’s low and near-term resistance at 1.3645.
Eurostat said the annual rate of consumer inflation accelerated to 0.9% in November, after slumping to a four year low of 0.7% in October. Economists had forecast an annual increase of 0.8%.
The slowdown in euro area inflation in October prompted the European Central Bank to cut rates to a record low 0.25% at its meeting in November.
Another report showed that the euro zone unemployment rate fell to 12.1% in October, down from 12.2% in September, the first fall since February 2011. However, the youth unemployment rate in the region rose to record high of 24.4% in October.
The euro rose to almost five year highs against the yen, with EUR/JPY ending Friday’s session at 139.21, the highest level since June 2009. For the week, the pair gained 1.46%.
The yen remained under heavy selling pressure amid heightened expectations that the Bank of Japan will implement further stimulus measures in order to meet its target of 2% inflation by 2015.
On Wednesday, BoJ board member Sayuri Shirai raised doubts over whether the inflation target can be met because of downside risks to growth, adding that the bank was open to taking further steps if growth slows.
In the week ahead, investors will be focusing on Friday’s U.S. nonfarm payrolls report for November, amid expectations that the Federal Reserve will start to scale back its stimulus program at one of its next few meetings.
Meanwhile, the outcome of Thursday's ECB policy meeting will also be in focus.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, December 2
The euro zone is to release revised data on its manufacturing PMI, while Spain and Italy are also to release individual reports.
Federal Reserve Chairman Ben Bernanke is to speak at an event in Washington. Later Monday, the Institute of Supply Management is to release its manufacturing PMI.
Tuesday, December 3
In the euro zone, Spain is to publish data on the change in the number of people employed.
Wednesday, December 4
The euro zone is to release data on retail sales, while Spain and Italy are to publish their services PMI’s.
The U.S. is to publish a revised estimate of third quarter gross domestic product, the broadest indicator of economic activity and the leading indicator of economic growth. Meanwhile, the Labor Department is to release its weekly report on initial jobless claims. The U.S. is also to publish data on factory orders.
Thursday, December 5
The ECB is to announce its benchmark interest rate. The announcement is to be followed by a press conference with President Mario Draghi.
The U.S. is to publish a revised estimate of third quarter gross domestic product, the broadest indicator of economic activity and the leading indicator of economic growth. Meanwhile, the Labor Department is to release its weekly report on initial jobless claims. The U.S. is also to publish data on factory orders.
Friday, December 6
Germany is to release data on factory orders.
The University of Michigan is to release the preliminary reading of its consumer sentiment index. The U.S. is to round up the week with the closely watched government data on nonfarm payrolls and the unemployment rate.