EUR/USD erased gains in calm trade

The euro was sliding against the US dollar on Friday before the release of reports to show the final value of Euro zones harmonized index of consumer prices and current account, as market players remained wary due to continuing lack of clarity over the future of Federal Reserves easing program.

EUR/USD reached its lowest point during todays trade at 1.3324 at 6:59 GMT, after which the pair consolidated at 1.3337. Support was likely to be found at August 12th low, 1.3278, while resistance was to be met at August 9th high, 1.3391.

Yesterday the greenback was provided with a steady support, after the Department of Labor in the United States reported that initial jobless claims declined to the lowest number since October 2007, by 15 000 to 320 000 during the week ending on August 10th. The number of claims during the preceding week was revised up to 335 000 from 333 000 previously, while preliminary estimates pointed 335 000 claims.

Another report showed that US consumer price inflation rose by 0.2% in July monthly, meeting expectations, after the 0.5% rise in June. Annual consumer inflation has risen by 2% in July in line with initial estimates. Core consumer price index, which does not include volatile elements such as food and energy costs, advanced 0.2% in July on a monthly basis, as it improved by the same rate a month ago.

Quite the opposite was markets reaction after the release of data, regarding US industrial production and manufacturing activity indexes for New York and Philadelphia. The greenback came under pressure after it became clear that industrial production remained flat in July in monthly terms, after the 0.2% advance in June, according to revised data, while experts had anticipated that industrial output will increase by 0.3%. Additionally, the New York Federal Reserve reported that its Empire State index, gauging business conditions, fell to a reading of 8.24 in August from 9.46 during July, while the Philadelphia FED Index rose at the slowest rate in four months during August to reach a reading of 9.3 down from a reading of 19.8 in July.

Later in the trading day the United States was to release data on building permits and housing starts, accompanied by the preliminary value of the consumer confidence index.

Meanwhile, the euro was trading with a frail gain of 0.02% on a daily basis against the British pound, as EUR/GBP cross reached 0.8538 at 7:25 GMT.