Investing.com - The euro hit its highest level since April
against the U.S. dollar on Friday, after European Central Bank
President Mario Draghi said the euro zone economy would begin to
recover this year.
EUR/USD hit 1.3366 on Friday, the pair's highest since April 2; the
pair subsequently consolidated at 1.3341 by close of trade,
rallying 2.67% for the week.
The pair is likely to find support at 1.3247, Friday's low and
resistance at 1.3485, the high of February 29.
The euro extended a rally that began on Thursday after the ECB kept
interest rates unchanged at 0.75%.
Speaking at the bank's post-policy meeting press conference Draghi
a gradual economic recovery would begin this year, as structural
reforms and actions by the ECB to tackle the region's debt crisis
continued to take effect.
Some investors had expected the ECB to hint a possible rate cuts in
the coming months going into Thursday's policy meeting.
The euro hit 20-months highs against the broadly weaker yen on
Friday, with EUR/JPY rallying 0.98% to settle at 118.98. Elsewhere,
the single currency hit its highest level against the Swiss franc
in over a year, with EUR/CHF up 0.47% to settle at 1.2185.
The yen remained under heavy selling pressure after Japan's
government approved a USD117 billion emergency stimulus package on
Friday and pledged to work more closely with the Bank of Japan to
combat deflation and spur growth.
The euro hit nine-month highs against the pound on Friday, with
EUR/GBP rallying 0.79% to 0.8271. Sterling remained under pressure
after unexpectedly weak U.K. manufacturing output in November added
to concerns that the economy slid back into a recession in the
In the U.S. official data showed that the trade deficit widened
unexpectedly in November, growing to USD48.7 billion, the biggest
deficit since April. Imports climbed 3.8% to USD231.3 billion,
while exports rose 1% to USD182.6 billion.
The data came one day after government data showed that China's
trade surplus widened unexpectedly in December, adding to signs of
recovery in the world's second largest economy.
In the week ahead, investors will be anticipating a speech by
Federal Reserve Chairman Ben Bernanke on monetary policy and the
recovery from the global financial crisis on Monday, as well as
Tuesday's data on U.S. retail sales for December.
Data from China on fourth quarter gross domestic product and
industrial production will also be closely watched.
Ahead of the coming week, Investing.com has compiled a list of
these and other significant events likely to affect the markets.
Monday, January 14
The euro zone is to release official data on industrial production,
while Italy is also to release a report on industrial production.
In the U.S., Fed Chairman Ben Bernanke is to speak at the
University of Michigan; his comments will be closely watched for
any indications on the future possible direction of monetary
Tuesday, January 15
The euro zone is to produce official data on the trade balance, the
difference in value between imports and exports.
The U.S. is to publish government data on retail sales, the leading
indicator of consumer spending, which comprises the majority of
economic activity, as well as official data on producer price
inflation. In addition, the U.S. is to release data on
manufacturing activity in New York state and a report on business
Wednesday, January 16
The euro zone is to publish official data on consumer price
inflation, while Germany is to hold an auction of 10-year
Later Wednesday, the U.S. is to produce government data on consumer
inflation, in addition to data on industrial production and the
capacity utilization rate. The country is also to publish official
data on crude oil stockpiles, while the Fed is to publish its Beige
Book, which looks at current economic conditions.
Thursday, January 17
The ECB is to release its monthly bulletin, which contains the data
policymakers evaluate when making the monthly interest rate
Elsewhere, the U.S. is to produce official data on building
permits, a leading indicator of future construction activity, as
well as data on housing starts. The U.S. is also to release the
weekly government report on initial jobless claims and data on
manufacturing activity in Philadelphia.
Friday, January 18
China is to release official data on fourth quarter gross domestic
product, the broadest measure of economic output and the leading
indicator of growth. Beijing is also to release government data on
industrial output, fixed asset investment and retail sales.
The U.S. is to round up the week with preliminary data from the
University of Michigan on consumer sentiment, a leading indicator
of consumer spending.
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