Investing.com - The euro fell to an 11-day low against the U.S. dollar on Friday, as market sentiment was sharply hit after downbeat U.S. economic data sparked fresh concerns over the strength of the country’s recovery.
EUR/USD hit 1.3079 on Friday, the pair’s lowest since April 19; the pair subsequently consolidated at 1.3082 by close of trade on Friday, tumbling 1.15% over the week.
The pair was likely to find support at 1.3032, the low of April 9 and resistance at 1.3179, the high of May 3.
The Department of Labor said on Friday that the U.S. economy added 115,000 jobs in last month, far short of expectations for a 170,000 increase, after adding an upwardly revised 154,000 jobs in March.
The unemployment rate ticked lower to 8.1% but the labor participation rate also declined, as fewer people sought jobs.
Coupled with Thursday’s mixed economic reports, the data fuelled speculation the Federal Reserve will implement a third round of quantitative easing measures to stimulate growth.
On Thursday, the Institute of Supply Management said that its non-manufacturing purchasing manager's index declined to 53.5 in April from a reading of 56.0 in March. Analysts had expected the index to decline to 55.5 in March.
A separate report showed that non-farm business sector labor productivity declined 0.5% in the first quarter, in line with expectations, while unit labor costs rose 2%, below expectations for a 2.8% gain.
The data overshadowed an earlier report by the U.S. Department of Labor saying that the number of individuals filing for initial jobless benefits in the week ending April 28 fell to 365,000, dropping by the most since May 2011 and beating expectations for a decline to 380,000.
Market sentiment was also hit by concerns over political uncertainty in the euro zone, in the run-up to weekend elections in Greece and France, amid fears that leadership changes could hinder attempts to resolve the region's debt crisis.
The euro found some support on Thursday after European Central Bank chief Mario Draghi said that policymakers did not discuss an interest-rate cut at their monthly meeting earlier, when the bank left its benchmark interest rate unchanged at 1%, in a widely expected decision.
Draghi also refrained from pledging more liquidity boosting measures, saying that the bank’s long-term financing operations needed time to work
The comments came after an auction of Spanish government debt which met with solid investor demand but saw the country’s short-term borrowing costs rise sharply.
In the week ahead, investors will be closely watching election results in Greece and France, while in the U.S. a speech by Fed Chairman Ben Bernanke in Chicago on Thursday the main focus for the greenback.
China is to release a flurry of data, including reports on retail sales and inflation that will allow investors to gauge the strength of the world’s second largest economy.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, May 7
The euro zone is to publish a report on investor confidence, while Germany is to publish official data on factory orders.
Tuesday, May 8
In the euro zone, official data is to be released on German industrial production, a leading indicator of economic health. Later in the day, ECB President Draghi is due to speak in Frankfurt.
Wednesday, May 9
The U.S. is to produce government data on crude oil stockpiles. The country is also to hold a 10-year government bond auction.
Thursday, May 10
In the euro zone, official data is to be produced on French industrial production, followed by the ECB’s monthly bulletin.
The U.S. is also to produce official data on trade balance, followed by government reports on unemployment claims and import prices. The country is also to release government data on the federal budget balance and the Treasury currency report, while Federal Reserve Chairman Ben Bernanke is due to speak. His comments will be closely watched for any clues to the future possible direction of monetary policy.
Friday, May 11
The U.S. is to round up the week with government data on producer price inflation, a key gauge of consumer inflation, followed by a preliminary report by the University of Michigan on consumer sentiment, a leading indicator of consumer spending.
EUR/USD hit 1.3079 on Friday, the pair’s lowest since April 19; the pair subsequently consolidated at 1.3082 by close of trade on Friday, tumbling 1.15% over the week.
The pair was likely to find support at 1.3032, the low of April 9 and resistance at 1.3179, the high of May 3.
The Department of Labor said on Friday that the U.S. economy added 115,000 jobs in last month, far short of expectations for a 170,000 increase, after adding an upwardly revised 154,000 jobs in March.
The unemployment rate ticked lower to 8.1% but the labor participation rate also declined, as fewer people sought jobs.
Coupled with Thursday’s mixed economic reports, the data fuelled speculation the Federal Reserve will implement a third round of quantitative easing measures to stimulate growth.
On Thursday, the Institute of Supply Management said that its non-manufacturing purchasing manager's index declined to 53.5 in April from a reading of 56.0 in March. Analysts had expected the index to decline to 55.5 in March.
A separate report showed that non-farm business sector labor productivity declined 0.5% in the first quarter, in line with expectations, while unit labor costs rose 2%, below expectations for a 2.8% gain.
The data overshadowed an earlier report by the U.S. Department of Labor saying that the number of individuals filing for initial jobless benefits in the week ending April 28 fell to 365,000, dropping by the most since May 2011 and beating expectations for a decline to 380,000.
Market sentiment was also hit by concerns over political uncertainty in the euro zone, in the run-up to weekend elections in Greece and France, amid fears that leadership changes could hinder attempts to resolve the region's debt crisis.
The euro found some support on Thursday after European Central Bank chief Mario Draghi said that policymakers did not discuss an interest-rate cut at their monthly meeting earlier, when the bank left its benchmark interest rate unchanged at 1%, in a widely expected decision.
Draghi also refrained from pledging more liquidity boosting measures, saying that the bank’s long-term financing operations needed time to work
The comments came after an auction of Spanish government debt which met with solid investor demand but saw the country’s short-term borrowing costs rise sharply.
In the week ahead, investors will be closely watching election results in Greece and France, while in the U.S. a speech by Fed Chairman Ben Bernanke in Chicago on Thursday the main focus for the greenback.
China is to release a flurry of data, including reports on retail sales and inflation that will allow investors to gauge the strength of the world’s second largest economy.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, May 7
The euro zone is to publish a report on investor confidence, while Germany is to publish official data on factory orders.
Tuesday, May 8
In the euro zone, official data is to be released on German industrial production, a leading indicator of economic health. Later in the day, ECB President Draghi is due to speak in Frankfurt.
Wednesday, May 9
The U.S. is to produce government data on crude oil stockpiles. The country is also to hold a 10-year government bond auction.
Thursday, May 10
In the euro zone, official data is to be produced on French industrial production, followed by the ECB’s monthly bulletin.
The U.S. is also to produce official data on trade balance, followed by government reports on unemployment claims and import prices. The country is also to release government data on the federal budget balance and the Treasury currency report, while Federal Reserve Chairman Ben Bernanke is due to speak. His comments will be closely watched for any clues to the future possible direction of monetary policy.
Friday, May 11
The U.S. is to round up the week with government data on producer price inflation, a key gauge of consumer inflation, followed by a preliminary report by the University of Michigan on consumer sentiment, a leading indicator of consumer spending.