Investing.com - The euro pared back gains against the dollar on Friday after data showed that the U.S. economy expanded modestly in the final three months of 2014, supporting expectations for higher interest rates.
The Commerce Department reported that U.S. gross domestic product grew at an annual rate of 2.2% in the last three months of 2014, down from an initial estimate of 2.6% but ahead of expectations for a downward revision to 2.1% growth.
Other reports showed that U.S. pending home sales rose to a one-and-a-half year high in January and consumer sentiment also remained strong.
The February reading of the University of Michigan's consumer sentiment index was revised up to 95.4 from the preliminary reading of 93.6. While this was down from the previous month final reading of 98.1, it was the second highest level since January 2007.
EUR/USD was at one-month lows of 1.1194 in late trade, off earlier highs of 1.1244.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, ended the day almost unchanged at 95.29, not far from Thursday’s one-month highs of 95.43.
The dollar rallied on Thursday after stronger-than-forecast data on U.S. durable goods orders added to indications that the economic recovery is on track.
Earlier in the week, Federal Reserve Chair Janet Yellen said that if the economy keeps improving as the bank expects it will modify its forward guidance, but emphasized that a modification of its language should not be read as indicating that a rate hike would automatically happen within a number of meetings.
EUR/JPY was up 0.15% to 133.9 late Friday, recovering from earlier one-month lows of 133.43.
In the week ahead, Friday’s U.S. employment report will be closely watched, while Thursday’s European Central Bank monetary policy meeting will also be in focus.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, March 2
The euro zone is to produce preliminary data on consumer prices and a report on unemployment.
In the U.S., the Institute of Supply Management is to report on manufacturing activity.
Tuesday, March 3
In the euro zone, Spain is to report on the change in the number of people employed.
Wednesday, March 4
The euro zone is to release revised data on service sector output, as well as a report on retail sales.
The U.S. is to release the ADP non-farm payrolls report, while looks at private sector jobs growth. Later in the day, the ISM is to report on services sector activity.
Thursday, March 5
In the euro area, Germany is to release data on factory orders.
The ECB is also to announce its monetary policy decision. The rate announcement will be followed by a post-policy meeting press conference with President Mario Draghi.
The U.S. is to release the weekly report on initial jobless claims and data on factory orders.
Friday, March 6
The U.S. is to round up the week with the closely watched government report on nonfarm payrolls, the unemployment rate and average earnings and a report on the trade balance.