Investing.com - " The euro fell sharply against the dollar on
Friday as expectations that the European Central Bank may cut rates
weighed, while the dollar was lifted after unexpectedly strong U.S.
manufacturing data reinforced the view that the Federal Reserve
could start tapering stimulus sooner than expected.
EUR/USD ended Friday's session at 1.3492, 0.68% lower for the day.
For the week, the pair lost 2.15%.
The pair is likely to find support at 1.3425 and resistance at
1.3570, the high of October 15.
The euro slid after data on Thursday showing that euro zone
inflation fell to a four year low in October raised concerns that
the ECB may ease monetary policy as soon as this week to help shore
Eurostat said consumer price inflation in the currency bloc slowed
to 0.7% in October, the slowest pace since November 2009, from 1.1%
A separate report showed that the euro zone unemployment rate rose
to a record high 12.2% in September.
The dollar was boosted after unexpectedly strong U.S. manufacturing
data added to expectations that the Fed could start to taper its
asset purchase program as early as next month.
The Institute of Supply Management said its manufacturing
purchasing managers' index rose to 56.4 in October, the highest
since April 2011, from 56.2 in September. Economists had expected
the index to tick down to 55.0.
The Fed left its USD85 billion-a-month asset purchase program in
place following its monthly meeting on Wednesday and was more
optimistic than expected in its assessment of the economy. Fed
officials said the economy is expanding "at a moderate pace" and
said downside risks were diminishing.
The bank gave no clear indication whether it would start scaling
back stimulus at the December meeting or continue it into the start
The single currency also ended the week sharply lower against the
pound and the yen, with EUR/GBP falling 0.83% to 0.8472 and EUR/JPY
down 1.08% to settle at 133.16.
In the week ahead, investors will be awaiting the outcome of
Thursday's ECB policy meeting and press conference with President
On Friday the U.S. is to release the nonfarm payrolls report for
October, which will help investors assess expectations for a
possible reduction in Fed stimulus.
Data released on Wednesday showed that the U.S. private sector
added fewer jobs than expected in October. Payroll processing firm
ADP said non-farm private employment rose by a seasonally adjusted
130,000 in October, below expectations for an increase of 150,000.
The U.S. is also to release preliminary data on third quarter
Ahead of the coming week, Investing.com has compiled a list of
these and other significant events likely to affect the markets.
Monday, November 4
In the euro zone, Spain and Italy are to release data on
The U.S. is to release data on factory orders, a leading indicator
Tuesday, November 5
In the U.S., the ISM is to release a report on service sector
Wednesday, November 6
The euro zone is to release data on retail sales. Meanwhile, Spain
and Italy are to release data on service sector activity and
Germany is to publish a report on factory orders.
Thursday, November 7
Germany is to release a report on industrial production. Later in
the day, the ECB is to announce its benchmark interest rate. The
announcement is to be followed by a press conference with President
The U.S. is to publish a preliminary estimate of third quarter
gross domestic product, the broadest indicator of economic activity
and the leading indicator of economic growth. Meanwhile, the Labor
Department is to release its weekly report on initial jobless
Friday, November 8
In the euro zone, Germany is to release data on the trade balance,
while France is to produce a report on industrial production.
The University of Michigan is to release the preliminary reading of
its consumer sentiment index. The U.S. is to round up the week with
the closely watched government data on nonfarm payrolls and the
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