EUR/USD erases gains as U.S. data triggers flight from risk

NEW YORK (Forex News Now) – The euro fell against the dollar on Friday, erasing earlier gains, after weak U.S. economic data triggered a flight from risky assets.

In U.S. afternoon currency trading, EUR/USD traded at 1.293, down 0.16 percent on the day, after pulling back from a fresh 2-month high of 1.3007.

Treasury Department data showed earlier that global demand for long-term U.S. financial assets slowed in May, as foreign central banks reduced their holdings of Treasury bills and investors abroad sold stocks.

According to forex analysis, EUR/USD was likely to touch support around Thursday’s low, 1.2708, and encounter immediate resistance around the high of May 10, 1.3094.

Also Friday, a University of Michigan survey reported that U.S. consumer sentiment in July plunged to levels last seen in March 2009. The data overshadowed an upbeat report on U.S. consumer price inflation.

Meanwhile, the euro plunged versus the yen: EUR/JPY traded at 112.05, down 0.96 percent on the day.