Euro extends rally against dollar, hitting fresh 2-month high

NEW YORK (Forex News Now) – The euro extended its rally against the dollar on Thursday, hitting a fresh 2-month high, as FX traders digested worse-than-expected data on the U.S. manufacturing sector.

In late U.S. currency trading, EUR/USD hit 1.2955, its highest since May 10. The currency pair later pulled back slightly to trade at 1.2949, up a massive 1.63 percent on the day.

The euro’s gains came after official reports showed that manufacturing activity in the Philadelphia region and New York State cooled significantly in July, sparking fears over the strength of the U.S. economic recovery. The data came a day after the Federal Reserve lowered its projection for U.S. gross domestic product, the broadest measure of economic activity.

According to forex analysis, EUR/USD was likely to touch support around the daily low, 1.2708, and encounter immediate resistance around the high of May 3, 1.3332.

On Friday, the U.S. Bureau of Labor Statistics was due to publish a key report on U.S. consumer price inflation, and the European Union’s statistics agency, Eurostat, was to release data on the euro zone trade balance.

Meanwhile, the euro rose versus sterling on Thursday: EUR/GBP traded at 0.8376, up 0.35 percent on the day.

By ForexNewsNow Team

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