Investing.com - The euro slid against the U.S. dollar on Friday, paring some of the week’s gains after disappointing German producer price inflation data while investors eyed ongoing discussions on restructuring Greece’s debt.
EUR/USD hit 1.2985 on Friday, the pair’s highest since January 4; the pair subsequently consolidated at 1.2929 by close of trade on Friday, adding 2.28% over the week.
The pair is likely to find support at 1.2838, the low of January 19 and resistance at 1.3072, the high of January 4.
Official data showed on Friday that German producer price inflation fell unexpectedly in December, ticking down 0.4% after a 0.1% rise the previous month. Analysts had expected German PPI to rise 0.1% in December.
In the U.S., industry data showed that existing home sales in the U.S. rose less-than-expected in December, advancing to 4.61 million after a rise to 4.39 million the previous month.
Analysts had expected existing home sales to rise to 4.65 million in December.
Meanwhile, officials said that Greece was nearing an agreement with creditors on a debt restructuring deal, aimed at erasing EUR100 billion of the country’s EUR360 billion debt burden and securing another tranche of international aid.
The euro found support earlier in the week as successful government debt auctions by Spain and France eased concerns that borrowing costs for euro zone countries would rise, after ratings downgrades on the countries by Standard & Poor's earlier in the month.
Spain sold EUR6.61 billion of medium to long-term debt at broadly lower yields, exceeding the maximum target of EUR4.5 billion set for the auction, while France auctioned EUR7.97 billion of medium and long-term securities.
The single currency was also boosted after the International Monetary Fund said it wanted to increase its lending capacity by as much as USD500 billion, having identified a potential need for USD1 trillion in coming years.
Sentiment remained supported on Thursday after the U.S. Department of Labor said the number of people who filed for unemployment assistance in the week ending January 13 declined unexpectedly, falling to the lowest level in almost four years.
The number of individuals filing for initial jobless benefits fell to 352,000 from 402,000 the previous week, surpassing expectations for a fall to 385,000.
The data came after reports showing that the number of building permits issued in the U.S. was unchanged at 0.68 million in December, holding steady near the highest level since March 2010, while housing starts rose less-than-expected.
Data also showed that core consumer price inflation rose 0.1% in December, in line with expectations after a 0.2% rise the previous month, while consumer price inflation was flat in December, confounding expectations for a 0.1% rise.
In the coming week, investors will be eyeing developments in the euro zone, with finance ministers from the single currency bloc meeting in Brussels on Monday, with Greece’s debt restructuring deal likely to be at the top of the agenda.
Markets will also be closely watching the outcome of Thursday’s Federal Reserve policy setting meeting, as well as Friday’s preliminary data on U.S. fourth-quarter gross domestic product.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, January 23
The euro zone is to release a report on consumer confidence, an important indicator of consumer spending.
Tuesday, January 24
The euro zone is to publish preliminary data activity in the manufacturing and service sectors, while France and Germany are to produce individual reports. The euro zone is also to release official data on industrial new orders, a key indicator of production.
Meanwhile, European Union finance ministers are to hold discussions in Brussels throughout the day.
Wednesday, January 25
In the euro zone, the Ifo Institute is to publish a report on German business climate, a key gauge of economic health. European Central Bank President Mario Draghi is due to speak later in the day; his comments will be closely watched for any clues to the future possible direction of monetary policy.
The U.S. is to release industry data on pending home sales, a leading indicator of demand in the housing market, as well as official data on crude oil stockpiles. The Federal Reserve is to announce the federal funds rate and publish its official rate statement.
Elsewhere, the World Economic Forum is to begin its five-day annual meeting in Davos in Switzerland.
Thursday, January 26
The euro zone is to release a report by market researchers Gfk on German consumer climate, a leading indicator of consumer spending.
In the U.S., official data is to be produced on durable goods, an important indicator of production, as well as on unemployment claims and new home sales, a key gauge of economic health.
Friday, January 27
In the euro zone, the ECB is to release a report on M3 money supply.
The U.S. is to round up the week with preliminary data on the country’s fourth quarter GDP and GDP price index, followed by a revised data from the University of Michigan on consumer sentiment and inflation expectations.
EUR/USD hit 1.2985 on Friday, the pair’s highest since January 4; the pair subsequently consolidated at 1.2929 by close of trade on Friday, adding 2.28% over the week.
The pair is likely to find support at 1.2838, the low of January 19 and resistance at 1.3072, the high of January 4.
Official data showed on Friday that German producer price inflation fell unexpectedly in December, ticking down 0.4% after a 0.1% rise the previous month. Analysts had expected German PPI to rise 0.1% in December.
In the U.S., industry data showed that existing home sales in the U.S. rose less-than-expected in December, advancing to 4.61 million after a rise to 4.39 million the previous month.
Analysts had expected existing home sales to rise to 4.65 million in December.
Meanwhile, officials said that Greece was nearing an agreement with creditors on a debt restructuring deal, aimed at erasing EUR100 billion of the country’s EUR360 billion debt burden and securing another tranche of international aid.
The euro found support earlier in the week as successful government debt auctions by Spain and France eased concerns that borrowing costs for euro zone countries would rise, after ratings downgrades on the countries by Standard & Poor's earlier in the month.
Spain sold EUR6.61 billion of medium to long-term debt at broadly lower yields, exceeding the maximum target of EUR4.5 billion set for the auction, while France auctioned EUR7.97 billion of medium and long-term securities.
The single currency was also boosted after the International Monetary Fund said it wanted to increase its lending capacity by as much as USD500 billion, having identified a potential need for USD1 trillion in coming years.
Sentiment remained supported on Thursday after the U.S. Department of Labor said the number of people who filed for unemployment assistance in the week ending January 13 declined unexpectedly, falling to the lowest level in almost four years.
The number of individuals filing for initial jobless benefits fell to 352,000 from 402,000 the previous week, surpassing expectations for a fall to 385,000.
The data came after reports showing that the number of building permits issued in the U.S. was unchanged at 0.68 million in December, holding steady near the highest level since March 2010, while housing starts rose less-than-expected.
Data also showed that core consumer price inflation rose 0.1% in December, in line with expectations after a 0.2% rise the previous month, while consumer price inflation was flat in December, confounding expectations for a 0.1% rise.
In the coming week, investors will be eyeing developments in the euro zone, with finance ministers from the single currency bloc meeting in Brussels on Monday, with Greece’s debt restructuring deal likely to be at the top of the agenda.
Markets will also be closely watching the outcome of Thursday’s Federal Reserve policy setting meeting, as well as Friday’s preliminary data on U.S. fourth-quarter gross domestic product.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, January 23
The euro zone is to release a report on consumer confidence, an important indicator of consumer spending.
Tuesday, January 24
The euro zone is to publish preliminary data activity in the manufacturing and service sectors, while France and Germany are to produce individual reports. The euro zone is also to release official data on industrial new orders, a key indicator of production.
Meanwhile, European Union finance ministers are to hold discussions in Brussels throughout the day.
Wednesday, January 25
In the euro zone, the Ifo Institute is to publish a report on German business climate, a key gauge of economic health. European Central Bank President Mario Draghi is due to speak later in the day; his comments will be closely watched for any clues to the future possible direction of monetary policy.
The U.S. is to release industry data on pending home sales, a leading indicator of demand in the housing market, as well as official data on crude oil stockpiles. The Federal Reserve is to announce the federal funds rate and publish its official rate statement.
Elsewhere, the World Economic Forum is to begin its five-day annual meeting in Davos in Switzerland.
Thursday, January 26
The euro zone is to release a report by market researchers Gfk on German consumer climate, a leading indicator of consumer spending.
In the U.S., official data is to be produced on durable goods, an important indicator of production, as well as on unemployment claims and new home sales, a key gauge of economic health.
Friday, January 27
In the euro zone, the ECB is to release a report on M3 money supply.
The U.S. is to round up the week with preliminary data on the country’s fourth quarter GDP and GDP price index, followed by a revised data from the University of Michigan on consumer sentiment and inflation expectations.