EUR/USD hits daily highs as New York Empire manufacturing index disappoints

The euro advanced to daily highs against the US dollar on Friday, after the release of downbeat manufacturing data regarding the New York region, while the upside for the euro may remain restrained, as the annual CPI in the Euro zone slowed down to a four-week low in October.

EUR/USD touched a session high at 1.3488 at 13:47 GMT, after which consolidation followed at 1.3482, gaining 0.18% for the day. Support was likely to be received at November 14th low, 1.3418, while resistance was to be seen at November 14th high, 1.3495.

Earlier on trading Friday it became clear that the harmonized consumer price index in the European Union (EU) slowed down to a four-year low in October. According to data by Eurostat, the CPI in the region climbed 0.9% during the 12 months through October, but slowing down in comparison with the rate, registered during the 12 months through September, which was 1.3%. What is more, this result appears to be the weakest since October 2009. The data boosted concerns that the EU might probably head towards a continuous period of deflation.

In the Euro zone, the final annualized rate of consumer inflation reached 0.7% in October, or the least since November 2009, which confirmed the preliminary rate, announced by Eurostat on October 31st. On a monthly basis, the final harmonized CPI dipped 0.1% in October, meeting expectations.

Meanwhile, in the United States, manufacturers in the region of New York said that business conditions deteriorated in November, as new orders and shipments decreased, according to a survey by the Federal Reserve Bank for New York. The index, gauging activity in manufacturing, dropped to a reading of -2.21 in November, marking its first negative value since May. In October the index came in at 1.52. Values below zero are usually considered as an indication that activity in the sector has contracted. Preliminary estimates pointed an increase to 5.00. The sub-index of new orders plunged to -5.53 in November from a reading of 7.75 in October. The gauge for shipments fell to -0.53 this month from a value of 13.12 a month ago. Labor market conditions in the region probably worsened, as the sub-index of employment dropped to 0.00 in November from 3.61 in the preceding month.

At the same time, the index of import prices declined 0.7% in October compared to a month ago, after a revised down 0.1% uptick in September. Experts had anticipated that the index will fall less, by 0.5% in October. In annual terms, import prices in the United States decreased 2.0% in October, after another 1.0% drop in September.

Elsewhere, the euro was losing ground against the pound, as EUR/GBP cross fell 0.13% on a daily basis to trade at 0.8368 at 14:09 GMT. EUR/JPY pair was advancing 0.39% to trade at 135.15 at 14:10 GMT.