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Forexpros – The euro surged against the U.S. dollar Thursday, as manufacturing activity in the Philadelphia-region contracted for the fourth straight month in August, renewing concerns over the strength of the U.S. economy.
EUR/USD hit 1.2361 during U.S. afternoon trade adding 0.58%
The pair was likely to find short-term support at 1.2255, the session low and a four-day low and resistance at 1.2384, the high of August 14.
The Federal Reserve Bank of Philadelphia reported its manufacturing index came in at minus 7.1 in August, from July’s reading of minus 12.9, missing expectations for a reading of minus 5.
The report came after data on Wednesday showing that a gauge of manufacturing activity in New York fell into contraction territory in August for the first time since October 2011.
Earlier Thursday, the Department of Labor said the number of people who filed for unemployment assistance in the U.S. last week rose to 366,000, a four-week high and slightly above expectations for an increase to 365,000.
In a separate report, the U.S. Commerce Department said housing starts fell by 1.1% in July to a seasonally adjusted 0.746 million last month, compared to expectations for a decline of 0.5% to 0.757 million.
But the number of building permits issued in July rose 6.8% to 0.812 million, compared to expectations for an increase of 1.2% to 0.770 million.
The reports sparked fresh speculation that the Federal Reserve may turn to fresh stimulus measures in the near future to shore up growth.
The flurry of data came after significantly stronger-than-expected U.S. retail sales numbers for July earlier in the week tempered expectations for another round of quantitative easing by the U.S. central bank.
The euro was little changed against the pound, with EUR/GBP inching up 0.02% to 0.7836, but gained ground against the yen, with EUR/JPY rising 0.56% to 97.61.
The pound strengthened broadly earlier, after data showed that U.K. retail sales rose unexpectedly in July, while the previous months figure was revised up, indicating that the U.K. economy may not be as weak as feared.
In the euro zone, official data showed that consumer price inflation held steady at 2.4% in July, unchanged from the previous month and in line with market expectations.
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