Investing.com - The euro rose to two-month highs against the dollar on Friday after data showed that U.S. growth was revised sharply lower in the fourth quarter and euro zone inflation rose more than expected in February.
EUR/USD hit session highs of 1.3824, the strongest since December 27, before settling at 1.3801. For the week, the pair gained 0.49%.
The pair is likely to find support at 1.3685 and resistance at 1.3850.
The drop in the dollar came after the Commerce Department reported that U.S. fourth quarter gross domestic product was revised down to an annual rate of 2.4%, from a preliminary estimate of 3.2%. Analysts had expected a downward revision to 2.5%.
Earlier in the week, Fed Chair Janet Yellen acknowledged recent weakness in U.S. data, saying it indicates softness in the economy.
In testimony to the Senate banking committee in Washington, Ms. Yellen said it was hard to say how much the recent soft data was due to weather and added that the bank would be attentive to signals on whether the recovery is progressing in line with expectations.
The euro was boosted after data on Friday showed that the annual rate of consumer inflation in the euro zone rose 0.8% in February, above expectations for a reading of 0.7%.
The inflation rate is still well below the European Central Bank’s 2% target, but the data eased pressure on the bank to tighten monetary policy at its upcoming policy meeting on Thursday.
The common currency also gained ground against the yen and the pound. EUR/JPY ended Friday’s session up 0.34% at 140.48, while EUR/GBP also rose 0.34% to 0.8244.
In the week ahead, investors will be anticipating Friday’s U.S. nonfarm payrolls report for an indication of the strength of the recovery in the labor market, while Thursday’s interest rate decision and press conference by the ECB will also be closely watched.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, March 3
In the euro zone, Spain and Italy are to release data on manufacturing activity. Meanwhile, ECB President Mario Draghi is to speak in the European Parliament in Brussels.
The U.S. is to release data on personal spending, while the Institute of Supply Management is to release data on manufacturing activity.
Tuesday, March 4
In the euro zone, Spain is to release data on the change in the number of people unemployed.
Wednesday, March 5
The euro zone is to release data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. Spain and Italy are to release data on service sector activity.
The U.S. is to release the ADP report on private sector job creation, which leads the government’s nonfarm payrolls report by two days. Meanwhile, the ISM is to publish a report service sector activity.
Thursday, March 6
The ECB is to announce its benchmark interest rate. The announcement is to be followed by a press conference with President Mario Draghi.
The U.S. is to publish the weekly report on initial jobless claims and data on factory orders.
Friday, March 7
In the euro zone, Germany is to publish data on industrial production.
The U.S. is to round up the week with the closely watched government data on nonfarm payrolls and the unemployment rate.