Investing.com – The week ending February 18 saw the euro close higher against the U.S. dollar for the first week in almost a month, after remarks by a European Central Bank member revived expectations of higher interest rates in the euro zone.
EUR/USD hit 1.3714 on Friday, the pair’s highest since February 10; the pair subsequently consolidated at 1.3691 by close of trade on Friday, advancing 1.35% over the week.
The pair is likely to find support at 1.3461, Wednesday’s low and resistance at 1.3824, the high of February 3.
The euro gained broadly on Friday after ECB Executive Board member, Lorenzo Bini Smaghi, said the bank may need to raise interest rates as global inflation pressures mount.
The comments came just two weeks after ECB President Trichet talked down the prospect of rate hikes during an ECB February press conference, reversing his position after sounding hawkish in January.
Data on Friday showing that German producer price inflation recorded its largest monthly increase since mid 2008 also lifted the single currency.
Meanwhile, the dollar was hit by concerns over a possible confrontation between Israel and Iran, with Iranian warships reported to be on their way to the Suez Canal, because of the U.S.'s strong ties to Israel.
Looking ahead, concerns over Portugal’s debt problems look likely to continue after the yield on Portuguese government bonds hit a fresh euro lifetime high on Friday. Yields on five- and 10-year Portuguese debt are now trading above 7%, considered a key threshold for whether a country can continue to fund itself.
Next week, the biggest focus will be the release on Friday of preliminary data on fourth quarter U.S. gross domestic product. Before that, markets in the U.S. are to remain closed on Monday for a national holiday.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, February 21
The euro zone is to publish preliminary data on activity in the manufacturing and services sectors across the 17-nation currency bloc, while Germany and France are to publish individual reports. In addition, the Ifo Institute for Economic Research is to publish a report on German business climate, a leading indicator of economic health.
Also Monday, markets in the U.S. are to remain closed for the President’s Day holiday.
Tuesday, February 22
In the euro zone, research group, Gfk, are to publish a report on German consumer climate, a leading indicator of consumer spending.
The U.S. is to publish data on consumer confidence compiled by the Conference Board as well as industry data on house prices and a report on manufacturing activity in Richmond.
Wednesday, February 23
The euro zone is to publish official data on industrial new orders, a leading indicator of economic health, while the U.S. is to publish industry data on existing home sales.
Thursday, February 24
In the euro zone, Germany is to publish final data on fourth quarter GDP, the broadest measure of economic activity and the primary gauge of the economy's health.
Meanwhile, the U.S. is to publish a flurry of data, with reports on durable goods orders, a leading indicator of production as well as data on initial jobless claims, an important signal of overall economic health. The country is also to publish a report on new home sales.
Friday, February 25
In the euro zone, Germany is to publish preliminary data on consumer price inflation, which accounts for a majority of overall inflation, while France is to publish data on consumer spending. Meanwhile, the ECB is to publish a report on M3 money supply and private lending.
The U.S. is to round up the week with preliminary data on fourth quarter GDP, the broadest measure of economic activity and the primary gauge of the economy's health. Meanwhile, the University of Michigan is to publish revised data on consumer sentiment and inflation expectations.
EUR/USD hit 1.3714 on Friday, the pair’s highest since February 10; the pair subsequently consolidated at 1.3691 by close of trade on Friday, advancing 1.35% over the week.
The pair is likely to find support at 1.3461, Wednesday’s low and resistance at 1.3824, the high of February 3.
The euro gained broadly on Friday after ECB Executive Board member, Lorenzo Bini Smaghi, said the bank may need to raise interest rates as global inflation pressures mount.
The comments came just two weeks after ECB President Trichet talked down the prospect of rate hikes during an ECB February press conference, reversing his position after sounding hawkish in January.
Data on Friday showing that German producer price inflation recorded its largest monthly increase since mid 2008 also lifted the single currency.
Meanwhile, the dollar was hit by concerns over a possible confrontation between Israel and Iran, with Iranian warships reported to be on their way to the Suez Canal, because of the U.S.'s strong ties to Israel.
Looking ahead, concerns over Portugal’s debt problems look likely to continue after the yield on Portuguese government bonds hit a fresh euro lifetime high on Friday. Yields on five- and 10-year Portuguese debt are now trading above 7%, considered a key threshold for whether a country can continue to fund itself.
Next week, the biggest focus will be the release on Friday of preliminary data on fourth quarter U.S. gross domestic product. Before that, markets in the U.S. are to remain closed on Monday for a national holiday.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, February 21
The euro zone is to publish preliminary data on activity in the manufacturing and services sectors across the 17-nation currency bloc, while Germany and France are to publish individual reports. In addition, the Ifo Institute for Economic Research is to publish a report on German business climate, a leading indicator of economic health.
Also Monday, markets in the U.S. are to remain closed for the President’s Day holiday.
Tuesday, February 22
In the euro zone, research group, Gfk, are to publish a report on German consumer climate, a leading indicator of consumer spending.
The U.S. is to publish data on consumer confidence compiled by the Conference Board as well as industry data on house prices and a report on manufacturing activity in Richmond.
Wednesday, February 23
The euro zone is to publish official data on industrial new orders, a leading indicator of economic health, while the U.S. is to publish industry data on existing home sales.
Thursday, February 24
In the euro zone, Germany is to publish final data on fourth quarter GDP, the broadest measure of economic activity and the primary gauge of the economy's health.
Meanwhile, the U.S. is to publish a flurry of data, with reports on durable goods orders, a leading indicator of production as well as data on initial jobless claims, an important signal of overall economic health. The country is also to publish a report on new home sales.
Friday, February 25
In the euro zone, Germany is to publish preliminary data on consumer price inflation, which accounts for a majority of overall inflation, while France is to publish data on consumer spending. Meanwhile, the ECB is to publish a report on M3 money supply and private lending.
The U.S. is to round up the week with preliminary data on fourth quarter GDP, the broadest measure of economic activity and the primary gauge of the economy's health. Meanwhile, the University of Michigan is to publish revised data on consumer sentiment and inflation expectations.