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Forex - Euro rises to session highs against dollar

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Shutterstock photo - - The euro rose to session highs against the dollar on Wednesday after official data showed that U.S. retail slaes were flat in in July, while strong gains against sterling also boosted the single currency.

EUR/USD was up 0.27% to 1.3403 after falling to session lows of 1.3342 earlier, close to last Wednesday's nine-month lows of 1.3332.

The pair was likely to find support at around the 1.3370 level and resistance at 1.3450.

The dollar turned lower after the Commerce Department said that U.S. retail sales were flat last month, disappointing expectations for a 0.2% increase.

Core retail sales, which exclude auto sales, rose just 0.1% in July, compared to expectations for a 0.4% gain.

The euro fell session lows earlier after official data showed that industrial output in the euro area fell 0.3% in June. It was the second consecutive monthly decline, and missed expectations for a 0.3% increase.

The report came one day after data showed that German economic sentiment deteriorated sharply this month, falling to a 20 month low, largely due to geopolitical tensions.

The euro zone was to publish data on economic growth and inflation on Thursday, amid expectations for weak readings. Weak data would add to pressure on the European Central Bank to implement fresh measures to shore up the recovery after it cut rates to record lows in June.

The euro then pared back losses against the dollar, bolstered by strong gains against sterling, after a dovish inflation report from the Bank of England tempered expectations for a rate hike before then end of the year.

The pound weakened against the other major currencies after the BoE cut its wage growth forecast and said the rate of wage growth would be critical in determining the future timing of rate hikes.

Earlier Wednesday, the latest U.K. jobs report showed that average earnings in the U.K. contracted 0.2% in the three months to June. It was the first decline since 2009.

The weak wage growth data offset a decline in the unemployment rate to 6.4% and a drop in the number of people claiming jobless benefits.

EUR/GBP was up 0.68% to 0.80.05, recovering from session lows of 0.7923. offers an extensive set of professional tools for the financial markets.

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