Investing.com - The euro rallied against the U.S. dollar on Friday, amid indications that European policymakers are looking at implementing moves to stem the crisis in the euro zone, while stronger-than-forecast U.S. jobs data also fuelled a broad based risk rally.
EUR/USD hit 1.2133 on Thursday, the weekly low; the pair settled at 1.2384 by close of trade on Friday, up 0.70% on the week.
The pair is likely to find support at 1.2224, last Monday’s low and resistance at 1.2537, the high of July 5.
The euro turned broadly higher on Friday after European Central Bank President Mario Draghi indicated Thursday that the bank would restart its bond buying program, to help lower Spanish and Italian borrowing costs.
Markets initially turned lower following Draghi’s remarks, with the euro weakening across the board after he indicated that any intervention by the ECB to calm bond markets would not come before September.
Speaking at the ECB’s post-policy meeting press conference, Draghi also said that any steps by the ECB were 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 ECB left its benchmark interest rate unchanged at a record low 0.75% on Thursday.
Investor sentiment was also boosted after the U.S. Department of Labor said the economy added 163,000 jobs in July, the biggest increase since February and outstripping expectations for an increase of 100,000, following a downwardly revised increase of 64,000 the previous month.
However, the U.S. unemployment rate unexpectedly ticked up to 8.3%, from 8.2% in the preceding month, keeping alive speculation over further monetary stimulus from the Federal Reserve.
On Wednesday, the Federal Reserve refrained from implementing fresh easing measures following its policy meeting, but the central bank said economic growth had slowed in the first half of the year and reiterated that it stood ready to provide additional stimulus as necessary.
In the week ahead, market participants will continue to keep a close eye on developments in the euro zone, as investors continue to digest the implications of the ECB's recent decisions.
Markets will also be paying close attention to speeches by Fed Chairman Ben Bernanke on Monday and Tuesday, amid ongoing speculation over the possibility of more easing from the U.S. central bank.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, August 6
The euro zone is to produce a report on investor confidence, an important indicator of economic health.
In the U.S., Fed Chairman Ben Bernanke is to speak; his comments will be closely watched for any indications of the future possible direction of monetary policy.
Tuesday, August 7
In the euro zone, Italy is to release official data on second quarter gross domestic product, the broadest measure of economic activity and the foremost indicator of the economy's health. Elsewhere, Germany is to produce official data on factory orders, a leading indicator of production.
Later Tuesday, Fed Chairman Ben Bernanke is to speak at an event in Washington DC.
Wednesday, August 8
In the euro zone, Germany is to hold an auction of 10-year government bonds and publish official data on industrial production, a leading indicator of economic health.
The U.S. is to release government data on labor costs and productivity, leading indicators of consumer inflation. The country is also to release official data crude oil stockpiles.
Thursday, August 9
The ECB is to publish its monthly bulletin, which gives a detailed analysis of current and future economic conditions from the bank's perspective.
Later in the day, the U.S. is to publish its weekly report on initial jobless claims as well as a report on the trade balance, the difference in value between imports and exports.
Friday, August 10
The U.S. is to round up the week with official data on import prices and the federal budget balance.
EUR/USD hit 1.2133 on Thursday, the weekly low; the pair settled at 1.2384 by close of trade on Friday, up 0.70% on the week.
The pair is likely to find support at 1.2224, last Monday’s low and resistance at 1.2537, the high of July 5.
The euro turned broadly higher on Friday after European Central Bank President Mario Draghi indicated Thursday that the bank would restart its bond buying program, to help lower Spanish and Italian borrowing costs.
Markets initially turned lower following Draghi’s remarks, with the euro weakening across the board after he indicated that any intervention by the ECB to calm bond markets would not come before September.
Speaking at the ECB’s post-policy meeting press conference, Draghi also said that any steps by the ECB were 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 ECB left its benchmark interest rate unchanged at a record low 0.75% on Thursday.
Investor sentiment was also boosted after the U.S. Department of Labor said the economy added 163,000 jobs in July, the biggest increase since February and outstripping expectations for an increase of 100,000, following a downwardly revised increase of 64,000 the previous month.
However, the U.S. unemployment rate unexpectedly ticked up to 8.3%, from 8.2% in the preceding month, keeping alive speculation over further monetary stimulus from the Federal Reserve.
On Wednesday, the Federal Reserve refrained from implementing fresh easing measures following its policy meeting, but the central bank said economic growth had slowed in the first half of the year and reiterated that it stood ready to provide additional stimulus as necessary.
In the week ahead, market participants will continue to keep a close eye on developments in the euro zone, as investors continue to digest the implications of the ECB's recent decisions.
Markets will also be paying close attention to speeches by Fed Chairman Ben Bernanke on Monday and Tuesday, amid ongoing speculation over the possibility of more easing from the U.S. central bank.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, August 6
The euro zone is to produce a report on investor confidence, an important indicator of economic health.
In the U.S., Fed Chairman Ben Bernanke is to speak; his comments will be closely watched for any indications of the future possible direction of monetary policy.
Tuesday, August 7
In the euro zone, Italy is to release official data on second quarter gross domestic product, the broadest measure of economic activity and the foremost indicator of the economy's health. Elsewhere, Germany is to produce official data on factory orders, a leading indicator of production.
Later Tuesday, Fed Chairman Ben Bernanke is to speak at an event in Washington DC.
Wednesday, August 8
In the euro zone, Germany is to hold an auction of 10-year government bonds and publish official data on industrial production, a leading indicator of economic health.
The U.S. is to release government data on labor costs and productivity, leading indicators of consumer inflation. The country is also to release official data crude oil stockpiles.
Thursday, August 9
The ECB is to publish its monthly bulletin, which gives a detailed analysis of current and future economic conditions from the bank's perspective.
Later in the day, the U.S. is to publish its weekly report on initial jobless claims as well as a report on the trade balance, the difference in value between imports and exports.
Friday, August 10
The U.S. is to round up the week with official data on import prices and the federal budget balance.