Forexpros – The euro traded lower against the U.S. dollar Friday, hitting a 6 day low, as economic growth fears in the euro zone and lowered hopes for fresh stimulus steps by the European Central Bank pressured the single currency.
EUR/USD hit 1.2262 during European trade, the pair’s lowest since August 3; the pair subsequenty consolidated at 1.2271, giving back 0.28%.
The pair was likely to find support at 1.2167, the low of August 3 and resistance at 1.2388, Thursday’s high.
The single currency weakness occurred after the ECB reported Thursday that the economic outlook for the euro zone faced a number of downside risks, with financial market tensions and their potential impact on growth posing the key threats.
The ECB revised down its forecast for economic growth to 0.6% in 2013, down from 1% previously and forecast a 0.3% contraction in growth this year, slightly worse than its previous forecast of for a 0.2% contraction.
In addition, optimism that the ECB will soon move to cut high Spanish and Italian borrowing costs faded as investors waited for more details of the bank’s proposed bond buying program to emerge.
Separately, global growth concerns re-emerged after official data showed earlier that China’s trade surplus narrowed unexpectedly in July, dropping to USD25.1 billion from a USD31.7 billion surplus.
Meanwhile, the greenback remained supported after Thursday’s strong U.S. economic data dampened speculation that the Federal Reserve may announce a third round of quantitative easing in the near future.
Elsewhere, the euro was fractionally higher against the pound with EUR/GBP adding 0.07%, to hit 0.7875.
Also Friday, official data showed that industrial production in France was unexpectedly flat in June, disappointing expectations for a 0.4% rise and following a downwarldy revised 2.1% decline the previous month.
Later in the day, the U.S. was to release official data on import prices.
Forexpros
