Investing.com - The euro fell sharply against the dollar on Friday as the greenback rebounded following steep losses in the previous session after the Federal Reserve’s decision not to hike interest rates.
EUR/USD was down 1.19% to 1.1298 late Friday, after hitting a three-week high of 1.1459 overnight.
The greenback sold off sharply after the U.S. central bank left short-term interest rates unchanged on Thursday, amid concerns over soft inflation and the effects of recent market volatility on the U.S. economy.
The Fed said it wanted to see "some further improvement in the labor market," and be "reasonably confident" that inflation will increase before hiking rates.
While the decision was not completely unexpected the Fed’s concerns over the uncertain outlook for global growth rattled financial markets and pressured the dollar lower.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.78% to 95.36 late Friday after falling as low as 94.19 in early trade. The index ended the week 0.2% lower.
In the week ahead, investors will be turning their attention to Wednesday’s index of manufacturing activity from China and surveys on private sector activity from the euro zone for a fresh indication on the strength of the global economy.
Market participants will also be closely watching a speech by Fed chair Janet Yellen on Thursday.
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 21
The U.S. is to release a report on existing home sales.
Wednesday, September 23
The euro zone is to publish preliminary data on manufacturing and service sector activity.
European Central Bank President Mario Draghi is to testify on monetary policy before the European Parliament's Economic and Monetary Committee, in Brussels.
Thursday, September 24
In the euro area, the Ifo Institute is to report on German business climate.
The U.S. is to release data on durable goods orders, initial jobless claims and new home sales.
Fed Chair Janet Yellen is to speak at an event at the University of Massachusetts.
Friday, September 25
The U.S. is to round up the week with revised data on second quarter economic growth and a revised report on consumer sentiment.