Forex - EUR/USD shoots up on strong U.S. jobs, housing data

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Investing.com - The euro bolstered against the U.S. dollar on Thursday after U.S. weekly jobless claims came in less than expected while U.S. housing starts beat market forecasts.

Investors ditched the safe-haven greenback and took on risk amid hopes the world's largest economy may be picking up its pace of recovery in wake of good news coming out of the once battered housing and labor markets.

In U.S. trading on Thursday, EUR/USD was trading down 0.49% at 1.3355, up from a session low of 1.3270, and off from a high of 1.3378.

The pair was likely to find support at 1.3258, Wednesday's low, and resistance at 1.3394, Tuesday's high.

In the U.S. earlier, U.S. Department of Labor reported that the number of individuals filing for weekly jobless benefits last week fell by 37,000 to a seasonally adjusted five-year low of 335,000, much more than market calls for a decline of 7,000 to 365,000.

The news sparked demand for risk early in the session on Thursday, which sent investors selling safe-haven dollar positions.

Meanwhile, the Commerce Department said U.S. housing starts jumped by 12.1% in December to an annual unit rate of 954,000, the highest level since 2008, beating out expectations for a 4.6% increase to 890,000.

A separate report showed that the Philly Fed's manufacturing index fell to -5.8 in January from 4.6 the previous month, missing expectations for a 5.8 reading.

Ebbing borrowing costs in Spanish government bond auctions pushed the pair up as well.

Spain's Treasury sold EUR4.5 billion worth of debt, in line with the full targeted amount amid heavy turnout.

Elsewhere, the European Central Bank said in its monthly report released earlier that economic weakness in the eurozone will persist throughout the rest of 2013 though the economy should begin to recover gradually later in the year.

The euro, meanwhile, was up against the pound and up against the yen, with EUR/GBP trading up 0.66% at 0.8356, and EUR/JPY trading up 1.75% at 119.50.

The yen has come under pressure in recent weeks on expectations for more aggressive easing steps by the Bank of Japan, which will hold a monetary policy meeting next week.

On Friday, the U.S. will release preliminary data from the University of Michigan on consumer sentiment, a leading indicator of consumer spending.








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This article appears in: Investing , Forex and Currencies

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