The euro was unable to hold to gains on Friday against the US dollar and dropped during the American session despite US data. Near the end of the week, EUR/USD was up 80 pips from the level it had seven days ago, steady above 1.1800.
US data weakens USD but not enough
Friday’s data showed a rise in US retail sales and CPI but with readings below expectations. The inflation print triggered a decline of the US Dollar across the board. EUR/USD jumped from 1.1805 to 1.1874 but then turned to the downside, moving again toward 1.1800.
It was about to end the week hovering around 1.1815/20, down for the second day in a row but positive for the week. It is the first gain after falling during the previous four weeks The minutes of the FOMC meeting released on Wednesday and some profit taking could have weakened the USD over the week.
After a busy week, the next one looks thin regarding economic reports. In the US, the most important data will be industrial production for September, to be released on Tuesday. Also, traders will keep an eye on FOMC members. Yellen will open the week on Sunday.
In the Eurozone, final inflation numbers for September will be released on Tuesday, but no change is expected from the preliminary reading. “However, it will be interesting to see which components caused the fall in service price inflation and whether they point towards any sustained upwards or downwards trend in core inflation, which will be important for ECB policy normalisation going forward”, said analysts at Danske Bank. The next ECB meeting is October 26.
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