Investing.com - The euro ended the week sharply lower against the U.S. dollar on Friday, as ongoing concerns over the worsening debt crisis in the euro zone weighed on demand for the shared currency.
EUR/USD hit 1.3186 on Friday, the pair’s lowest since February 21; the pair subsequently consolidated at 1.3196 by close of trade on Friday, tumbling 1.98% over the week.
The pair is likely to find support at 1.3114, the low of February 17 and resistance at 1.3355, the high of March 1.
The euro came under pressure on Friday after official data showed that German retail sales fell unexpectedly in January, sparking fresh concerns over the outlook for the euro zone’s largest economy.
Sentiment also weakened as Spain’s government raised its budget deficit target to 5.8% of gross domestic product for 2012, compared to a previous target of 4.4%.
The single currency plunged over 1% against the greenback on Wednesday after the European Central Bank allotted EUR529.5 billion in loans to 800 lenders in its second long-term refinancing operation, amid concerns that the action was equivalent to quantitative easing.
Meanwhile, the dollar found broad support as Federal Reserve Chairman Ben Bernanke dampened expectations for a third round of monetary easing in testimony to Congress on Wednesday, after he acknowledged the recent improvement in the labor market and said that higher oil prices could push up inflation.
The remarks came after the U.S. Commerce Department reported that gross domestic product increased at a seasonally adjusted annual rate of 3.0% during the fourth quarter, up from a preliminary estimate of 2.8%.
Other reports last week continued to paint a mixed picture of the U.S.
economic recovery. Data on Tuesday showed that U.S. durable goods orders dropped to a three-year low in January.
The Institute for Supply Management said Thursday that U.S. manufacturing activity expanded at a slower rate than expected in February, while official data showed that U.S. initial jobless claims declined modestly in the previous week, holding close to the lowest level since March 2008.
Also Thursday, official data showed that the unemployment rate in the euro zone climbed to the highest level since the inception of the euro in January, while the annualized rate of inflation also increased.
A separate report showed that the manufacturing sector in the single currency bloc contracted for the seventh consecutive month in February.
In the week ahead, investors will be looking ahead to Friday’s data on U.S. non-farm payrolls, to gauge the strength of the country’s economic recovery. Market participants will also be continuing to watch developments in Europe, ahead of an interest rate announcement by the ECB on Thursday.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, March 5
The euro zone is to publish official data on retail sales, as well as revised data on service sector growth and a report on investor confidence.
Later Monday, the U.S. is to produce government data on factory orders, while the Institute of Supply Management is to release a report on service sector growth.
Tuesday, March 6
The euro zone is to publish revised data on fourth quarter gross domestic product.
Wednesday, March 7
In Europe, Germany is to release official data on factory orders, a leading indicator of production.
The U.S. is to publish a report on ADP non-farm payrolls, which leads government data by two days. The country is also to release revised data on non-farm productivity and labor costs, which are important inflationary indicators, as well as a report on crude oil stockpiles.
Thursday, March 8
In the euro zone, Germany is to release official data on industrial production, a leading indicator of economic health. In addition, the ECB is to announce its benchmark interest rate; the announcement will be followed by a closely watched press conference where ECB head Mario Draghi will discuss monetary policy.
Also Thursday, the U.S. is to produce government data on initial jobless claims, a leading indicator of economic health.
Friday, March 9
In the euro zone, France is to release official data on industrial production, a leading indicator of economic health.
The U.S. is to round up the week with government data on non-farm payrolls and the unemployment rate, leading indicators of economic health, in addition to data on the trade balance and average hourly earnings.
EUR/USD hit 1.3186 on Friday, the pair’s lowest since February 21; the pair subsequently consolidated at 1.3196 by close of trade on Friday, tumbling 1.98% over the week.
The pair is likely to find support at 1.3114, the low of February 17 and resistance at 1.3355, the high of March 1.
The euro came under pressure on Friday after official data showed that German retail sales fell unexpectedly in January, sparking fresh concerns over the outlook for the euro zone’s largest economy.
Sentiment also weakened as Spain’s government raised its budget deficit target to 5.8% of gross domestic product for 2012, compared to a previous target of 4.4%.
The single currency plunged over 1% against the greenback on Wednesday after the European Central Bank allotted EUR529.5 billion in loans to 800 lenders in its second long-term refinancing operation, amid concerns that the action was equivalent to quantitative easing.
Meanwhile, the dollar found broad support as Federal Reserve Chairman Ben Bernanke dampened expectations for a third round of monetary easing in testimony to Congress on Wednesday, after he acknowledged the recent improvement in the labor market and said that higher oil prices could push up inflation.
The remarks came after the U.S. Commerce Department reported that gross domestic product increased at a seasonally adjusted annual rate of 3.0% during the fourth quarter, up from a preliminary estimate of 2.8%.
Other reports last week continued to paint a mixed picture of the U.S.
economic recovery. Data on Tuesday showed that U.S. durable goods orders dropped to a three-year low in January.
The Institute for Supply Management said Thursday that U.S. manufacturing activity expanded at a slower rate than expected in February, while official data showed that U.S. initial jobless claims declined modestly in the previous week, holding close to the lowest level since March 2008.
Also Thursday, official data showed that the unemployment rate in the euro zone climbed to the highest level since the inception of the euro in January, while the annualized rate of inflation also increased.
A separate report showed that the manufacturing sector in the single currency bloc contracted for the seventh consecutive month in February.
In the week ahead, investors will be looking ahead to Friday’s data on U.S. non-farm payrolls, to gauge the strength of the country’s economic recovery. Market participants will also be continuing to watch developments in Europe, ahead of an interest rate announcement by the ECB on Thursday.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, March 5
The euro zone is to publish official data on retail sales, as well as revised data on service sector growth and a report on investor confidence.
Later Monday, the U.S. is to produce government data on factory orders, while the Institute of Supply Management is to release a report on service sector growth.
Tuesday, March 6
The euro zone is to publish revised data on fourth quarter gross domestic product.
Wednesday, March 7
In Europe, Germany is to release official data on factory orders, a leading indicator of production.
The U.S. is to publish a report on ADP non-farm payrolls, which leads government data by two days. The country is also to release revised data on non-farm productivity and labor costs, which are important inflationary indicators, as well as a report on crude oil stockpiles.
Thursday, March 8
In the euro zone, Germany is to release official data on industrial production, a leading indicator of economic health. In addition, the ECB is to announce its benchmark interest rate; the announcement will be followed by a closely watched press conference where ECB head Mario Draghi will discuss monetary policy.
Also Thursday, the U.S. is to produce government data on initial jobless claims, a leading indicator of economic health.
Friday, March 9
In the euro zone, France is to release official data on industrial production, a leading indicator of economic health.
The U.S. is to round up the week with government data on non-farm payrolls and the unemployment rate, leading indicators of economic health, in addition to data on the trade balance and average hourly earnings.