The euro was holding positions against the US dollar on Friday, following weaker than projected current account data out of the Euro zone, as market players were focusing on the US reports, scheduled later in the day.
EUR/USD recovered from a session low at 1.3324, recorded at 6:59 GMT, after which consolidation followed at 1.3338, down by 0.06% on a daily basis. Support was likely to be found at August 12th low, 1.3278, while resistance was to be met at August 9th high, 1.3391.
Earlier on Friday it became clear that Euro zones current account produced a smaller surplus in June, as trade surplus also shrank. The surplus decreased to the seasonally adjusted 16.9 billion EUR in the month of June from 19.5 billion EUR in May, as the latter was a revision down from 19.6 billion EUR previously. Experts had anticipated an increase to 21.2 billion EUR. In addition, the euro region registered a positive trade balance at the amount of 11.8 billion EUR in June down from the revised up 18.3 billion EUR in May. This data implied an export figure greater than the import result, as the moderate demand worldwide continued to suppress exports rate of increase. In a situation like this, domestic demand will be of great significance for Euro regions economic recovery.
Another report showed that the final reading of the harmonized index of consumer prices (HICP) in the single currency zone slowed down in July on a monthly basis, decreasing by 0.5%, meeting expectations, after a month ago consumer prices recorded a 0.1% uptick. In annual terms, the index rose by 1.6% in July, again in consonance with projections, following the identical rate of increase as in June.
Meanwhile, yesterday the greenback was provided with a steady support, after the Department of Labor in the United States reported that initial jobless claims declined to the lowest number since October 2007, by 15 000 to 320 000 during the week ending on August 10th. The number of claims during the preceding week was revised up to 335 000 from 333 000 previously, while preliminary estimates pointed 335 000 claims.
Quite the opposite was market’s reaction after the release of data, regarding US industrial production and manufacturing activity indexes for New York and Philadelphia. The greenback came under pressure after it became clear that industrial production remained flat in July in monthly terms, after the 0.2% advance in June, according to revised data, while experts had anticipated that industrial output will increase by 0.3%. Additionally, the New York Federal Reserve reported that its Empire State index, gauging business conditions, fell to a reading of 8.24 in August from 9.46 during July, while the Philadelphia FED Index rose at the slowest rate in four months during August to reach a reading of 9.3 down from a reading of 19.8 in July.
Markets were eyeing the last set of economic reports for the current week out of the United States, scheduled for release later in the day.
Elsewhere, the euro was losing ground against the British pound, as EUR/GBP cross erased 0.11% to trade at 0.8527 at 9:41 GMT. EUR/JPY pair was little changed, ticking down 0.04% on a daily basis to trade at 129.93 at 9:41 GMT.
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