Forex – EUR/USD pares back gains on soft industrial output data
Investing.com – The euro traded higher but gave back earlier gains against the dollar on Monday after eurozone industrial output figures came in slightly softer than expected.
A surprisingly bullish take on the eurozone economy among ECB governors sent the pair to highs not seen since early 2012 in recent sessions.
In U.S. trading on Monday, EUR/USD was trading up 0.17% at 1.3366, up from a session low of 1.3233, and off from a high of 1.3404.
The pair was likely to find support at 1.3037, the low from Jan. 9, and resistance at 1.3484, the high from Feb. 29, 2012
Official eurozone data released earlier revealed that industrial production among member countries fell 0.3% in November, down for the third consecutive month, missing expectations for a 0.1% increase.
The news prompted investors to sell the single currency for profits.
Last week, the European Central Bank voted unanimously to leave benchmark interest rates unchanged, a unified take on the economy that caught many investors off guard and sent the euro soaring against the greenback.
While most market participants were expecting the monetary authority to leave benchmark lending rates unchanged, not all did, while others were expecting more cautious language from ECB President Mario Draghi, who predicted recovery to gain steam later this year.
On Friday, the U.S. government reported that the country’s trade deficit widened unexpectedly in November, expanding to USD48.7 billion from a USD42.1 billion deficit during the previous month.
Analysts had expected the trade deficit to narrow to USD41.3 billion in November, though gains in imports of consumer goods painted a picture of improving consumer demand in the U.S., which gave investors room to leave the safety of the greenback and take on risk on Monday.
Consumer spending drives about 70% of total U.S. economic output.
Federal Reserve Chairman Ben Bernanke is due to speak in public later Monday, and markets will eagerly await any hints to future policy changes.
Contributed by Investing.com