The euro advanced to a fresh new seven-week highs against the greenback on Thursday, as uncertainty over the future of Federal Reserve Banks Quantitative Easing continued to persist, reflecting on the demand for the US dollar.
EUR/USD reached a new session high at 1.3392 at 14:15 GMT, the pairs highest since June 19th, after which consolidation followed at 1.3388. Support was likely to be received at current session low, 1.3227, while resistance was to be met at 1.3400.
Earlier today it was reported that German trade balance registered a wider surplus than projected in the month of June, amounting to 16.9 billion EUR, compared to the expected 15.0 billion EUR. Surplus, recorded during the preceding month was revised up to 13.6 billion EUR from 13.1 billion EUR previously. The seasonally adjusted trade balance also showed a larger surplus in June, 15.7 billion EUR compared to expectations of a figure of 15.2 billion EUR, following the revised up surplus of 14.6 billion EUR during May.
Also on Thursday, the European Central Bank revised down its forecast, regarding economic growth in the Euro zone, as was said in banks monthly bulletin in August. However, ECB expected that economy in the bloc will begin to recover gradually during the remaining months of this year, as the process will continue during 2014 as well. The Gross Domestic Product in the euro region will contract by 0.6% in 2013, while the previous forecast pointed a 0.4% contraction. On the other hand, according to banks bulletin, economy will expand by 0.9% in 2014, which was also below the previous forecast of a 1% economic growth. As far as inflation is concerned, it is expected, that it will remain close but below the intermediate-term objective of 2%.
Meanwhile, US dollar came under pressure, as recent economic data from the United States fueled the uncertainty over the future of Federal Reserve’s monthly asset purchases. Chicago Federal Reserve Bank Chairman Charles Evans said that he would not rule out the withdrawal of central bank’s stimulus measures at the bank’s meeting in September.
In addition, the greenback showed relatively weak reaction to the weekly report on US initial jobless claims. It became clear that their number rose by 5 000 to seasonally adjusted 333 000 during the week ended on August 3rd. Experts had anticipated a larger increase to 335 000 claims. During the preceding week the number of claims was revised up to 328 000 from 326 000 previously.
Elsewhere, the euro was trading lower against the sterling, as EUR/GBP cross erased 0.13% to reach 0.8600 at 14:42 GMT. The common currency was slightly losing ground against the Japanese yen as well, with EUR/JPY pair down by 0.06% to trade at 128.41 at 14:42 GMT.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
