Investing.com - The euro remained lower against the U.S. dollar
on Friday, after the release of downbeat U.S. consumer sentiment
data added to signs that the U.S. economic recovery is still not
strong enough for the Federal Reserve to begin scaling back its
EUR/USD hit 1.3000 during U.S. morning trade, the session low; the
pair subsequently consolidated at 1.3029, declining 0.51%.
The pair was likely to find support at 1.2965, the low of July 2
and resistance at 1.3147, Thursday's high.
In a preliminary report, the University of Michigan said its index
of consumer sentiment fell to 83.9 in July, from a reading of 84.1
the previous month, confounding expectations for a rise to 85.0.
On Wednesday, Bernanke said the central bank will continue to
maintain accommodative monetary policy for the foreseeable future,
citing low levels of inflation and the high unemployment rate.
The comments came after the minutes of the central bank's June
policy meeting showed that Fed policymakers remain divided over
when to begin tapering its USD85 billion-a-month asset purchase
The euro weakened earlier, after official data showed that
industrial production in the euro zone fell 0.3% in May, exceeding
expectations for a 0.2% downtick, after a 0.5% increase the
Sentiment on the single currency was also fragile after the
European Central Bank's monthly bulletin said Thursday that the
extended period of time the bank expects interest rates to remain
at present or lower levels is "flexible" and indicated that further
rate cuts are possible.
The euro was fractionally higher against the pound with EUR/GBP
edging up 0.08%, to hit 0.8630.
Also Friday, the U.S. Department of Labor said producer price
inflation rose 0.8% in June, more than the expected 0.5% gain,
after 0.5% increase the previous month.
Core producer price inflation, which excludes food and energy, rose
0.2% last month, compared to expectations for a 0.1% increase,
after a 0.1% rise in May.
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