The euro was trading close to session lows against the dollar on Thursday after stronger-than-forecast U.S. retail sales data added to signs that the economic recovery is deepening and offset a larger than expected increase in jobless claims.
EUR/USD fell to session lows of 1.6352 and was last down 1.6358, off Wednesday’s six-week highs of 1.3794.
The pair was likely to find support at 1.3739, Wednesday’s low and resistance at 1.3809, Wednesday’s high and a six week high.
The Commerce Department said Thursday that U.S. retail sales rose 0.7% in November, above expectations for a 0.6% increase. Core retail sales rose 0.4%, above forecasts for a 0.2% increase.
Separately, the Department of Labor said the number of people who filed for unemployment assistance in the U.S. last week rose to a two month high of 368,000, compared to expectations for an increase to 320,000 from the previous week’s revised total of 300,000.
The data did little to alter expectations that the Federal Reserve could begin tapering its USD85 billion a month asset purchase program at its policy meeting scheduled for December 17 - 18.
The euro came off highs against the dollar earlier, after data showed that industrial production in the euro area fell by 1.1% in October and rose just 0.2% from a year earlier.
Economists had forecast a monthly increase of 0.3% and an annual gain of 1.1%.
The euro’s losses were held in check as expectations for further monetary easing by the European Central Bank dimmed after the bank left monetary policy unchanged at its meeting this month, following a surprise rate cut in November.
The euro was trading close to five year highs against the yen, with EUR/JPY up 0.32% to 141.66, near Tuesday’s high of 142.15, the strongest level since October 2008.
Elsewhere, the dollar extended gains against the yen, with USD/JPY advancing 0.50% to 102.92, re-approaching the seven month high of 103.38 struck on Tuesday.
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