Forex Pros - The euro fell sharply against the U.S. dollar on Friday, pulling back from a one-week high after ratings agency Fitch downgraded Greece and warned that any attempt to extend the maturities of Greek sovereign debt would be considered a default.
EUR/USD hit 1.4345 on Friday, the pair's highest since May 13; the pair subsequently consolidated at 1.4158 by close of trade, easing up 0.48% over the week.
The pair is likely to find support at 1.4047, Monday's low and a six-week low and resistance at 1.4345, Friday's high.
Fitch lowered its credit rating on Greece by three notches; to B-plus from BB-plus and said a "soft" restructuring of the country's debt by European Union policy makers would be considered a default.
Earlier in the week, European political leaders floated the idea of extending Greece's debt-repayment schedule as it struggles to meet the terms of last year's EUR 110 billion rescue package.
The single currency was already under pressure as fears that debt contagion would spread to Spain, the euro zone's fourth largest economy, pushed up the country's borrowing costs.
Late Friday after the International Monetary Fund approved a EUR26 billion three-year loan to Portugal, as part of a bailout granted last year.
Meanwhile, data on Thursday showing a slowdown in manufacturing growth in the U.S. Mid-Atlantic region and an unexpected dip in existing home sales in April supported the view that the Federal Reserve is unlikely to tighten policy for some time to come.
Looking ahead to the coming week, U.S. data on durable goods and a second look at first quarter gross domestic product will be the main focus of attention, while the euro zone is to release a closely watched report on Germany's business climate.
Ahead of the coming week, Forex Pros has compiled a list of these and other significant events likely to affect the markets.
Monday, May 23
The euro zone is to publish preliminary data on manufacturing and service sector growth while France and Germany are also to publish individual reports.
Tuesday, May 24
The euro zone is also to release official data on industrial new orders, a leading indicator of production.
Later in the day, the U.S. is to publish government data on new home sales, a leading indicator of economic health.
Wednesday, May 25
In the euro zone, research group Gfk is to publish a report on German consumer climate.
Also Wednesday, the U.S. is to publish official data on durable goods orders, a leading indicator of production, as well as a government report on crude oil stockpiles.
Thursday, May 26
In the euro zone, the President of the European Central Bank Jean-Claude Trichet is to speak; his comments will be closely watched for any clues to the future direction of monetary policy.
In addition, the U.S. is to publish revised data on first quarter GDP, the broadest measure of economic activity and the primary gauge of the economy's health. The U.S. is also to publish its weekly report on initial jobless claims.
Friday, May 27
In the euro zone, Germany is to publish preliminary data on consumer price inflation, while the ECB is to publish data on M3 money supply and private loans.
The U.S. is to round up the week with a slew of economic data, including government reports on personal income and spending and industry data on pending home sales, while the University of Michigan is to publish revised data on consumer sentiment and inflation expectations.
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