EUR/USD edges higher but gains capped

Friday, April 19, 20130 comments

The euro edged higher against the U.S. dollar on Friday, but gains were limited by disappointing German data and amid speculation over a potential rate cut by the European Central Bank. 

EUR/USD hit 1.3076 during late Asian trade, the session high; the pair subsequently consolidated at 1.3064, adding 0.10%. 

The pair was likely to find support at 1.2969, the low of April 8 and resistance at 1.3138, the high of April 11. 

Official data showed that the German producer price index fell 0.2% in March, disappointing expectations for a 0.1% rise, after a 0.1% slip the previous month. 

The euro was also vulnerable after European Central Bank Governing Council member Jens Weidmann said Wednesday that the bank could cut interest rates if economic data indicated that it was warranted. 

Meanwhile, the greenback remained under pressure after data on Thursday showed that the Philly Fed manufacturing index fell to 1.3 in April from 2.0 last month, compared to expectations for a reading of 3.0. 

In addition, the Department of Labor said the number of individuals filing for initial jobless benefits last week rose by 4,000 to a seasonally adjusted 352,000, compared to expectations for an increase of 2,000 to 350,000. 

The euro was steady against the pound with EUR/GBP inching up 0.02%, to hit 0.8543. 

Trading was expected to remain light on Friday, as no major U.S. economic data was to be released. 

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