Forexpros – The euro jumped to a seven-day high against the U.S. dollar on Friday, shrugging off poor German retail sales data as signs of progress in tackling the euro zone’s debt crisis boosted demand for the single currency.
EUR/USD hit 1.2620 during early European trade, the pair’s highest since June 21; the pair subsequently consolidated at 1.2599, jumping 1.24%.
The pair was likely to find support at 1.2447, Thursday’s low and resistance at 1.2679, the high of June 21.
Sentiment on the euro strengthened broadly after euro zone leaders agreed at a highly anticipated summit in Brussels that the currency bloc’s banks could be recapitalized without adding to government debt.
The leaders discussed ways to reduce market pressure on Italy and Spain, where surging borrowing costs recently sparked concerns over the worsening of the region’s financial crisis, allowing them access to rescue loans without relinquishing control of their economies.
Euro zone officials also said they would speed up plans to create a single supervisor to oversee the euro zone’s banks, which will be considered “as a matter of urgency” by the end of 2012.
Italian Prime Minister Mario Monti welcomed the announcement, saying the agreement to consider short-term steps to ease borrowing costs “could be useful to Italy and many other states too.”
Earlier in the day, official data showed that German retail sales fell unexpectedly in May, ticking down 0.3% after a 0.2% decline the previous month. Analysts had expected retail sales to rise 0.1% in May.
A separate report showed that French consumer spending rose 0.4% in May, beating expectations for a flat reading and following a 0.7% increase the previous month.
Elsewhere, the euro was higher against the pound with EUR/GBP rising 0.29%, to hit 0.8041.
Later in the day, the euro zone was to release preliminary data on consumer price inflation, while the U.S. was to publish data on personal spending and on manufacturing activity in Chicago, followed by a revised report on consumer sentiment.
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