Forexpros – The euro rose to a fresh session high against the U.S. dollar on Friday, after better-than-expected euro zone retail sales data and as market sentiment improved ahead of a key U.S. employment report later in the day.
EUR/USD hit 1.2219 during European morning trade, the daily high; the pair subsequently consolidated at 1.2218, adding 0.30%.
The pair was likely to find support at 1.2054, the low of July 25 and resistance at 1.2330, the high of July 31.
Official data showed that retail sales in the euro zone rose 0.1% in June, beating expectations for a 0.1% decline and following a 0.8% rise the previous month.
But the euro’s gains were limited after European Central Bank President Mario Draghi said the bank may undertake bond purchases in order to bring down the “exceptionally high” borrowing costs of stressed euro zone members, but provided no explicit details on how and when these activities may be carried out.
Draghi also said that any such action by the ECB was conditional on euro zone governments experiencing difficulty on bond markets activating the bloc’s bailout funds to purchase government bonds and accepting strict conditions and supervision.
The statement disappointed market expectations for bold steps to counter the debt crisis, which have been building since Draghi pledged last week to do whatever is necessary to preserve the euro.
The ECB also left interest rates unchanged at a record low 0.75%.
Meanwhile, investors were eyeing the release of U.S. jobs data, as the results could give more indications on whether or not the Federal Reserve will need to add stimulus to shore up growth, after the central bank refrained from implementing fresh easing measures on Wednesday.
The euro was also higher against the pound with EUR/GBP adding 0.13%, to hit 0.7861.
Later in the day, the U.S. was to release government data on non-farm employment change and the unemployment rate. The Institute of Supply Management was also to publish a report on non-manufacturing activity.
Forexpros
