EUR/USD on session lows after US GDP, initial jobless claims

The euro fell to session lows against the US dollar, following the release of larger than projected GDP growth out of the United States, which suggested that economic recovery was on track.

EUR/USD tumbled to its lowest point today at 1.3239 at 12:33 GMT, also the pairs lowest since August 15th, after which consolidation followed at 1.3244. Support was likely to be received at August 15th low, 1.3204, while resistance was to be encountered at psychological 1.3300 level.

Earlier today it became clear that US economy expanded at a larger than anticipated rate during the second quarter of the year, as export and business investments were revised upwards, which suggested that positive economic development may continue during the rest of the year. US Department of Commerce said that the revised Gross Domestic Product expanded by 2.5% during Q2 annually, exceeding expectations of a growth rate of 2.2%, while the preliminary estimate pointed a 1.7% expansion. Corporate profits rose by 2.6% during Q2 compared to Q1, which may be an indication that companies could tend to hire new employees and expand their investment expenditures in the coming months.

A separate report said that the number of people who filed for unemployment assistance in the United States decreased during the past week, remaining on levels, which imply a positive labor market development. According to data by the Department of Labor, initial jobless claims dropped by 6 000 to 331 000 during the week ending on August 24th 2013, almost in line with expertsprojections of a drop to 332 000 claims. The result during the preceding week has been revised up by 1 000 to 337 000 claims. Published data showed that US jobless claims remained in proximity to the five-year low, registered in July. The average number of claims during the past four weeks, an indicator considered as lacking seasonal effects, increased by 750 to reach 331 250 claims. The Federal Reserve Bank observes closely the initial jobless claims data, as the bank looks for certainty that the process of adding new jobs will continue, in order to begin tapering its asset purchases.

Meanwhile, in the Euro zone, official data showed that German preliminary consumer price inflation remained flat in August compared to July, below the projected 0.1% uptick, while in July the consumer price index (CPI) advanced 0.5%. The annual German CPI showed an advance by 1.5% during August, slowing down in comparison with July, when the index rose by 1.9%. Experts had expected that the CPI will improve by 1.7%.

Also, earlier on Thursday it was reported that the number of unemployed people in Germany unexpectedly increased by 7 000 during the month of August compared to July, while expectations were confounded, as they pointed a decrease by 5 000. German unemployment rate remained steady at the seasonally adjusted 6.8% in August in consonance with expertsforecasts. In addition, Destatis statistics agency published data, according to which the number of unemployed in Germany dropped by 40 000 to 2.28 million during July on a monthly basis, while the rate of unemployment ticked down to 5.3% in July from 5.4% a month ago.

Market players used caution making decisions today, amid growing concerns over a possible US-led military strike against the Syrian government, following the alleged usage of chemical weapons last week.

Elsewhere, the euro was losing positions against the British pound, as EUR/GBP cross erased 0.63% to trade at 0.8539 at 13:43 GMT. EUR/JPY pair was also on negative territory, down by 0.08% to trade at 130.16 at 13:43 GMT.

Ultimately, following the release of upbeat US data, the dollar index, which tracks the strength of the US currency against a basket of six other major currencies, rose by 0.3% to reach 82.030.