Forex - EUR/USD touches session lows after U.S. data

The euro touched session lows against the dollar on Thursday after stronger-than-forecast U.S. economic data boosted expectations that the Federal Reserve will unwind its asset purchase program later this year.

EUR/USD hit 1.3288 during U.S. morning trade, the session low; the pair subsequently consolidated at 1.3292, shedding 0.32%.

The pair was likely to find support at 1.3264, Wednesday’s low and resistance at 1.3389, the session high.

The Department of Labor said the number of people who filed for unemployment assistance in the U.S. last week fell by 12,000 to 334,000, compared to expectations for a decline of 1,000 to 345,000.

Separately, the Commerce Department said U.S. retail sales rose 0.6% in May, led higher by increased automobile purchases, beating forecasts for a 0.4% increase. 

Core retail sales, which exclude auto sales, were up 0.3%, in line with expectations.

The dollar slumped to three-and-a-half month lows against the euro earlier and fell to 10-week lows against the yen as concerns over the prospect of an end to central bank stimulus fuelled a broad based sell-off in risk assets and the greenback.

Earlier this week the Bank of Japan disappointed expectations for measures to ease volatility in the government bond market. 

The BoJ’s lack of action, along with expectations that the Federal Reserve will begin to scale back its bond buying program fuelled safe haven inflows in to the yen.

The dollar remained lower against the yen following the data, withUSD/JPY down 1.86% to 94.20. The yen was also sharply higher against the euro, with EUR/JPY tumbling 2.23% to 125.17.

The World Bank revised down its forecast for global growth in 2013 to 2.2% from 2.4% at the beginning of the year earlier Thursday, saying the slowdown in the world economy was turning out to be unusually protracted.

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