Investing.com - The euro moved higher against the dollar on Friday as heightened concerns over geopolitical risks saw investors sell the dollar to lock in gains following its recent strong gains.
EUR/USD was up 0.35% to 1.3410 late Friday, trimming the week’s losses to 0.13%.
The pair is likely to find support at Wednesday’s eight month lows of 1.3332 and resistance at 1.3450.
Concerns over rising geopolitical tensions continued to dominate market sentiment on Friday after the U.S. launched airstrikes in Iraq, in a bit to halt the advance of extremists in the country’s north. A breakdown in the ceasefire between Israel and Gaza also fuelled widespread risk aversion.
However, fears over hostilities between Russia and Ukraine eased on Friday after Russia’s defense ministry said it had concluded military exercises it was holding close to the border with Ukraine.
The dollar showed little reactions after data on Friday showed that U.S. wholesale inventories rose by a smaller than forecast 0.3% in June.
The euro remained supported after the European Central Bank left monetary policy unchanged at the conclusion of its policy meeting on Thursday.
ECB President Mario Draghi indicated that the bank was pleased with the weaker exchange rate for the euro, which should help to bolster inflation and shore up exports. He also played down concerns over the recent slowdown in inflation, saying it is mostly due to energy prices.
The single currency was also higher against the yen and the pound on Friday, with EUR/JPY rising 0.31% to 136.83 and EUR/GBP rising 0.70% to 0.7996.
In the week ahead, investors will be awaiting Tuesday’s ZEW report on German economic sentiment, amid concerns over the outlook for the recovery in the bloc’s largest economy. Wednesday’s U.S. retail sales report and Thursday’s preliminary data on second quarter growth in the euro area will also be in focus.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday as there are no relevant events on this day.
Tuesday, August 12
The ZEW Institute is to release its closely watched report on German economic sentiment, a leading indicator of economic health.
Wednesday, August 13
The euro zone is to release data on industrial production.
The U.S. is to publish data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity.
Thursday, August 14
The euro zone is to publish preliminary data on second quarter gross domestic product, in addition to revised data on consumer price inflation.
The U.S. is to release the weekly report on initial jobless claims.
Friday, August 15
The U.S. is to round up the week with reports on manufacturing activity in New York state and industrial output, as well as preliminary data on consumer sentiment.