Investing.com - The euro rebounded from seven-week lows against the dollar on Friday after data showing that the U.S. economy created fewer-than-expected jobs in August dampened expectations that the Federal Reserve will start to unwind its stimulus program later this month.
EUR/USD pulled away from 1.3103, the lowest since July 19, to settle at 1.3177, 0.47% higher for the day and paring the week’s losses to just 0.07%.
The pair is likely to find support at 1.3103, Friday’s low and resistance at 1.3226, the high of September 2.
The Department of Labor said the U.S. economy added 169,000 jobs in August, fewer than the 180,000 forecast by economists.
The unemployment rate ticked down to a four-and-a-half year low of 7.3% from 7.4% in July, but this was partially due to more people dropping out of the labor force.
The report also said that job growth in July was revised down to 104,000 from 162,000, while June’s figure was revised down to 172,000 from 188,000.
The disappointing data curbed expectations that the Fed will start to unwind its USD85 billion-a-month asset purchase program at its upcoming policy meeting on September 17-18.
Fed Chairman Ben Bernanke has said that the decision to begin tapering will depend on whether economic data is strong enough.
The European Central Bank left interest rates unchanged at a record low of 0.5% and announced no new stimulus measures following its monthly meeting on Thursday, in a widely expected decision.
The euro came under pressure after ECB President Mario Draghi reiterated that bank rates will stay at current or lower levels for "an extended period," despite recent signs of economic recovery in the euro zone.
Data on Monday showed that manufacturing activity in Spain and Italy returned to growth for the first time since 2011.
Draghi said the unemployment levels in the euro zone remain high and added that recent volatility in oil and commodity markets could pose a threat to the region’s recovery.
Meanwhile, safe haven demand continued to be underpinned amid ongoing tensions over possible military intervention against Syria. On Friday Russian President Vladimir Putin warned the U.S. against launching military action against the Syrian government without U.N. approval.
In the week ahead, the dollar looks likely to remain under pressure ahead of the outcome of the Fed’s upcoming policy meeting later in the month. Investors will be looking ahead to Friday’s U.S. data on retail sales and consumer sentiment for indications on the strength of the economic recovery.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Wednesday, as there are no relevant events on this day.
Monday, September 9
The euro zone is to release a report on Sentix investor confidence.
Tuesday, September 10
France is to release data on industrial production and Italy is to publish data on gross domestic product.
Thursday, September 12
The ECB is to publish its monthly bulletin, which outlines the bank’s economic outlook. The euro zone is to publish data in industrial production.
The U.S. is to release the weekly government report on initial jobless claims, a leading economic indicator, as well as official data on import prices.
Friday, September 13
The U.S. is to round up the week with reports on retail sales and producer price inflation, as well as preliminary data from the University of Michigan on consumer sentiment.
EUR/USD pulled away from 1.3103, the lowest since July 19, to settle at 1.3177, 0.47% higher for the day and paring the week’s losses to just 0.07%.
The pair is likely to find support at 1.3103, Friday’s low and resistance at 1.3226, the high of September 2.
The Department of Labor said the U.S. economy added 169,000 jobs in August, fewer than the 180,000 forecast by economists.
The unemployment rate ticked down to a four-and-a-half year low of 7.3% from 7.4% in July, but this was partially due to more people dropping out of the labor force.
The report also said that job growth in July was revised down to 104,000 from 162,000, while June’s figure was revised down to 172,000 from 188,000.
The disappointing data curbed expectations that the Fed will start to unwind its USD85 billion-a-month asset purchase program at its upcoming policy meeting on September 17-18.
Fed Chairman Ben Bernanke has said that the decision to begin tapering will depend on whether economic data is strong enough.
The European Central Bank left interest rates unchanged at a record low of 0.5% and announced no new stimulus measures following its monthly meeting on Thursday, in a widely expected decision.
The euro came under pressure after ECB President Mario Draghi reiterated that bank rates will stay at current or lower levels for "an extended period," despite recent signs of economic recovery in the euro zone.
Data on Monday showed that manufacturing activity in Spain and Italy returned to growth for the first time since 2011.
Draghi said the unemployment levels in the euro zone remain high and added that recent volatility in oil and commodity markets could pose a threat to the region’s recovery.
Meanwhile, safe haven demand continued to be underpinned amid ongoing tensions over possible military intervention against Syria. On Friday Russian President Vladimir Putin warned the U.S. against launching military action against the Syrian government without U.N. approval.
In the week ahead, the dollar looks likely to remain under pressure ahead of the outcome of the Fed’s upcoming policy meeting later in the month. Investors will be looking ahead to Friday’s U.S. data on retail sales and consumer sentiment for indications on the strength of the economic recovery.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Wednesday, as there are no relevant events on this day.
Monday, September 9
The euro zone is to release a report on Sentix investor confidence.
Tuesday, September 10
France is to release data on industrial production and Italy is to publish data on gross domestic product.
Thursday, September 12
The ECB is to publish its monthly bulletin, which outlines the bank’s economic outlook. The euro zone is to publish data in industrial production.
The U.S. is to release the weekly government report on initial jobless claims, a leading economic indicator, as well as official data on import prices.
Friday, September 13
The U.S. is to round up the week with reports on retail sales and producer price inflation, as well as preliminary data from the University of Michigan on consumer sentiment.