EUR/USD consolidated following euro zone CPI data but endured losses after the US data releases later on Friday
The EUR/USD consolidated above 1.3150 following a consumer price inflation report for the euro zone, which matched expectations; the following US PCE and Consumer Confidence data dealt a blow to the euro.
The EUR/USD hit the session low of 1.3160 in European morning trade, and then consolidated at 1.3181, inching down by 0.01%.
Immediate support was seen at the August 27 low of 1.3151, a 11-month low, and stronger resistance was expected at 1.3243, the August 24 high.
According to preliminary data on the euro zone, consumer price inflation slid to 0.3% this month,down from the July 0.4%, which matched expectations.The August core consumer price inflation (excluding food, alcohol, tobacco, and energy)increased to 0.9%, compared to a year ealier, from the July 0.8%. Analysts’ expectations for core CPI this month were for a lack of change.
In a separate report, the euro zone unemployment rate was shown unalteredfor last month, at 11.5%, matching expectations.
Official data earlier on Friday pointed to a decline in German retail sales, by 1.4% for July, albeit expectations envisaged a 0.1% hike, after the June gain of 1.0%.The figures spurred concerns about the health of the biggest economy in the euro zone.
The dollar remained well bid in the wake of optimistic reports on Thursday confirming hopes of continuing US economic recovery.According to preliminary data, US economy had a second quarter growth which surpassed expectations. A separate report indicated an unexpected decline last week in the number of people filing for initial jobless benefits.
The focus for investors was the Ukraine situation, after Ukrainian President Poroshenko announced Russian military had “de facto” penetrated into eastern part of the country. Later on Friday a meeting of the UN Security Council was scheduled. The US said it had an array of options at its disposal to come to Ukraine’s assistance.
Later on, US Personal Consumption Expenditure figure came out at 1.5%, equal to last month’s value and to analysts’ expectations. University of Michigan Consumer Confidence increased to 82.5, topping both estimates and the July’s number of 81.8.
The American data gave a boost to the US dollar and it rallied against the common currency. As of 5:30 pm GMT, the EUR/USD is trading at 1.3142.
