Forexpros – The euro was steady against the U.S. dollar on Friday, after Germany expressed support for European Central Bank intervention to calm the euro zone’s debt woes, as markets focused on the release of U.S. data later in the day for additional indications on the country’s economic recovery.
EUR/USD hit 1.2365 during European morning trade, the daily high; the pair subsequently consolidated at 1.2362, inching up 0.05%.
The pair was likely to find support at 1.2257, Thursday’s low and resistance at 1.2442, the high of August 7.
Market sentiment improved after German Chancellor Merkel said earlier that declarations by ECB President Mario Draghi, who outlined conditional plans at the start of the month to buy bonds of troubled euro zone governments, were “completely in line” with the approach taken by European leaders and urged the bloc to now act swiftly to tackle its woes.
But investors remained cautious after official data showed that producer prices in Germany were unchanged in July, compared to expectations for a 0.4% rise and following a 0.4% decline the previous month.
In addition, the Bank of Spain said that Spanish banks’ bad loans rose to 9.42% of their outstanding portfolios in June, the highest level on record, up from 8.95% a month earlier.
Meanwhile, market participants eyed the release of U.S. consumer confidence data later in the day, after a string of mixed economic reports over the week left investors uncertain over whether the Federal Reserve will soon announce fresh stimulus measures.
Elsewhere, the euro was higher against the pound with EUR/GBP adding 0.13%, to hit 0.7865.
Later in the day, the U.S. was to release a preliminary report by the University of Michigan on consumer sentiment and inflation expectations.
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