The euro fell to four-week lows against the stronger dollar on Friday after comments by Federal Reserve Chairman Ben Bernanke bolstered the outlook for the U.S. economy in the coming year.

EUR/USD fell to 1.3583, the lowest level since December 5 and was last down 0.60% to 1.3589. For the week, the pair lost 1.59%.

The pair is likely to find support at 1.3525 and resistance at 1.3670, Friday’s high.

The dollar strengthened after outgoing Fed Chairman Ben Bernanke said the U.S. economy should continue to improve in 2014, but reiterated that monetary policy will remain “highly accommodative” for as long as needed.

“The combination of financial healing, greater balance in the housing market, less fiscal restraint, and, of course, continued monetary policy accommodation bodes well for U.S. economic growth in coming quarters,” Bernanke said. “Despite this progress, the recovery clearly remains incomplete”.

The comments came after the Fed’s December decision to roll back its asset purchase program to USD75 billion a month from USD85 billion a month starting this month.

In the euro zone, data showed that Spanish jobless claims fell by 107,570 in December from the previous month, indicating that the dire unemployment situation may be starting to ease.

Separate reports showed that the annual rate of consumer inflation in Italy slowed to 0.6% from 0.7% in November, while inflation in Spain remained unchanged at 0.3%.

The euro was weaker against the yen, with EUR/JPY falling to lows of 141.97, the lowest since December 19. The pair was last down 0.55% to 142.48, extending the week’s losses to 1.66%.

Trading conditions remained thin following the New Year’s holiday, while a severe snowstorm in the northeastern U.S. also kept activity light.

The shared currency was also lower against the pound, with EUR/GBP falling 0.42% to session lows of 0.8276. For the week, the pair fell 1.15%.

In the U.K., data on Friday showed that activity in the construction sector edged slightly lower in December, pulling back from November’s six-year high. The construction purchasing managers index fell to 62.1 from 62.6 a month earlier. Analysts had expected the index to tick down to 62.0.

In a separate report, the Bank of England said that U.K. mortgage approvals rose to 70,758 in November from 68,029 a month earlier. It was the highest level in nearly six years.

In the week ahead, the Fed is to publish the minutes of its December meeting on Wednesday, while the U.S. jobs report for December is scheduled to be released on Friday. Meanwhile, Thursday''s interest rate decision by the European Central Bank will also be in focus.

Ahead of the coming week, has compiled a list of these and other significant events likely to affect the markets.

Monday, January 6

Germany is to release preliminary data on consumer price inflation, which accounts for the majority of overall inflation.

The U.S. is to publish data on factory orders, while the Institute of Supply Management is to release data on service sector activity.

Tuesday, January 7

Germany is to release data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity, as well as data on the change in the number of people unemployed.

The euro zone is to produce preliminary data on consumer inflation.
The U.S. is to publish data on the trade balance, the difference in value between imports and exports.

Wednesday, January 8

Germany is to release reports on the trade balance and factory orders. Meanwhile, the euro zone is to produce data on the unemployment rate and a separate report on retail sales.

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.

Later Wednesday, the Federal Reserve is to publish what will be the closely watched minutes of its latest policy meeting.

Thursday, January 9

The ECB is to announce its benchmark interest rate. The announcement is to be followed by a press conference with President Mario Draghi.
Germany is to publish data on industrial production.

In the U.S., the Labor Department is to release its weekly report on initial jobless claims.

Friday, January 10

The U.S. is to round up the week with the closely watched government data on nonfarm payrolls and the unemployment rate.

Please LIKE our Facebook page - it makes us stronger