Forex - EUR/USD extends losses on disappointing E.Z. data

The euro extended losses against the U.S. dollar on Friday, after the release of disappoiting euro zone industrial production data, while demand for the greenback still remained under pressure. 

EUR/USD hit 1.3036 during European morning trade, the session low; the pair subsequently consolidated at 1.3044, shedding 0.39%. 

The pair was likely to find support at 1.2965, the low of July 2 and resistance at 1.3147, Thursday's high. 

Official data showed that industrial production in the euro zone fell 0.3% in May, exceeding expectations for a 0.2% downtick, after a 0.5% increase the previous month. 

The euro was also hit after the European Central Bank’s monthly bulletin said Thursday that the extended period of time the bank expects interest rates to remain at present or lower levels is “flexible” and indicated that further rate cuts are possible. 

Meanwhile, demand for the greenback remained under pressure after Federal Reserve Chairman Ben Bernanke on Wednesday said the Fed will continue to maintain accommodative monetary policy for the foreseeable future, citing low levels of inflation and the high unemployment rate.

Bernanke said the bank will not raise interest rates until the U.S. unemployment rate hits 6.5%.

The comments came after the minutes of the central bank’s June policy meeting showed that Fed policymakers remain divided over when to begin tapering its USD85 billion-a-month asset purchase program. 

The euro was fractionally lower against the pound with EUR/GBP easing 0.08%, to hit 0.8616. 

Later in the day, the U.S. was to produce official data on producer price inflation and preliminary data from the University of Michigan on consumer sentiment.