EUR/USD fell to session lows after US initial jobless claims

The euro slid to its lowest point today against the US dollar, after a weekly report out of the United States showed that the number of initial jobless claims fell more than projected during last week, as this could add to the case that the Federal Reserve Bank may be closer to executing a reduction of scale of its easing program at its upcoming monthly meeting.

EUR/USD hit a session low at 1.3260 at 12:30 GMT, after which consolidation followed at 1.3279, losing 0.24% for the day. Support was expected to be received at September 11th low, 1.3243, while resistance was likely to be encountered at current session high and also an almost two-week high, 1.3323.

Earlier today it became clear that the number of people who filed for unemployment assistance in the United States decreased below 300 000 for the first time since 2006, but however, the weekly report said that this final result was due more to a lag in the computer processing of the data in two states, rather than to a drastic improvement in the labor market in the country. The number of initial jobless claims dropped by 31 000 to 292 000 during the week ending on September 7th, marking their lowest point since April 2006. The non-working day due to the US Labor Holiday also influenced positively the above mentioned result. It is quite probable that during next week the number of claims will rise considerably, approaching the already recorded number of 325 000 claims. Experts had anticipated that claims will rise to 330 000, following the non-revised 323 000 claims during the preceding week. The average number of claims during the past four weeks, an indicator considered as lacking seasonal effects, decreased by 7 500 to reach 321 250 claims, or the lowest recorded number since October 2007.

At the same time, the US import price index remained flat in August on a monthly basis, giving an indication that global recovery was going at a slow pace and this was continuously keeping inflation rate on moderate levels. The index marked a 0.1% uptick in July. During the past six months the indicator has either remained unchanged, or has diminished. The annual performance of the index of import prices showed a 0.4% drop in August, confounding expectations of a 0.4% gain.

Meanwhile, factory output in the Euro zone decreased formidably in July, reaching its lowest level in three years, as this again raised concerns whether the common currency bloc could maintain the otherwise weak rate of economic recovery. Industrial production data out of the Euro region showed a certain mismatch with what was anticipated by experts, as this suggested a disappointing beginning of the third quarter of the year. What is more, this could be an indication that the Gross Domestic Product of the region may again shrink in Q3, after economy managed to emerge from the 18-month long recessionary period during the preceding quarter. Industrial production in the Euro zone contracted by 1.5% in July compared to June, marking the largest monthly decline since September 2012, while projections pointed a much lesser drop, by 0.3%. On annual basis, industrial output decreased by 2.1% in July, reaching levels, recorded in April 2010. Again preliminary estimates pointed a far slighter drop, by 0.2%.

Additionally, industrial production in Italy decreased unexpectedly in July, falling 1.1% on a monthly basis, as output dropped in almost all major sectors, except the sector of energy. Annual industrial production in the country recorded a 4.3% decline in July, marking the 23rd consecutive decrease, following the 2.1% drop in June. Actual results appeared to be much weaker than projections. Industrial production submitted signals of slow recovery, as it registered monthly gains in May and June.

Elsewhere, the euro was losing ground against the sterling, with EUR/GBP cross erasing 0.23% on a daily basis to trade at 0.8398. EUR/JPY pair was falling even more, by 0.73%, trading at 132.01.