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Forex - EUR/USD extends losses on strong U.S. economic reports

Published 05/31/2013, 10:31 AM
Updated 05/31/2013, 10:35 AM
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EUR/GBP
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Investing.com - The euro extended losses against the U.S. dollar on Friday, as the release of positive U.S. economic reports added to expectations for the Federal Reserve to taper its stimulus program in the near future.

EUR/USD hit 1.2960 during U.S. morning trade, the session low; the pair subsequently consolidated at 1.2965, retreating 0.62%.

The pair was likely to find support at 1.2915, the low of May 27 and resistance at 1.3049, the session high.

Revised data showed that the University of Michigan's consumer sentiment index rose to 84.5 in May, from a reading of 83.7 the previous month. Analysts had expected the index to remain unchanged this month.

A separate report showed that the Chicago purchasing managers' index climbed to 58.7 this month, from a reading of 49.0 in April, beating expectations for a rise to 50.0.

The reports came after official data showed that U.S. personal spending fell 0.2% in April, confounding expectations for a 0.1% rise, after a 0.1% increase the previous month.

The euro came under pressure earlier, after official data showed that the unemployment rate in the euro zone rose to a new record high of 12.2% in April, from 12.1% the previous month, in line with expectations.

Separately, a preliminary report showed that the bloc's consumer price index rose to an annualized rate of 1.4% this month, from 1.2% in April, as anticipated.

In Germany, Destatits said retail sales fell 0.4% in April, disappointing expectations for a 0.2% rise, after a 0.1% decline the previous month.

The euro was also lower against the pound with EUR/GBP edging down 0.15%, to hit 0.8551.

Also Friday, the Bank of England said that net lending to individuals in the U.K. rose by GBP1.4 billion in April, beating expectations for a GBP0.9 billion increase, after a GBP1.1 billion rise the previous month.


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