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Forex - EUR/USD remains lower after downbeat U.S. data

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Shutterstock photo - 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 stimulus program.

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 program.

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 previous month.

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. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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