Euro Firms on Data, USD Falters

The euro maintained a firmer tone in early Europe on Friday due to better than expected economic data, but the US dollar was unable to muster strength on mixed reports.

The latest Eurozone industrial production data was stronger than expected, with an output rise of 1.7% for January, which added an annual increase for the first time since 2008. US retail sales data was also stronger than expected, providing another indicator that the US economy is improving. Retail sales increased 0.3% for February, with an underlying 0.8% rise for the month. There were downward revisions to the January data, but overall confidence surrounding first-quarter spending levels is likely to remain healthy. However, there was a downward revision to the University of Michigan consumer confidence data.

Meanwhile, business inventories were also weaker. The January numbers were flat, a weaker reading than the 0.2 percent gain that analysts had expected. In addition the December numbers were revised to -0.3% from -0.2%, which put a damper on USD gains. The dollar was unable to regain ground and the EUR pushed to a high near 1.38 before consolidating near 1.3760.