The euro dipped below $1.32 on Friday morning as investors kept a keen eye on the developing situation in Ukraine. The common currency traded at $1.3182 at 6:15 GMT after U.S. economic data helped the dollar rally.

On Thursday, Reuters reported that the U.S. Commerce Department estimated that the nation’s GDP had expanded 4.0 percent annually in the second quarter.

The revised figure fell in line with recent U.S. economic indicators showing that the nation is getting back on track after years of financial uncertainty. U.S. economic data has been at the forefront of investors’ minds as markets wait for any indication that the Federal Reserve will raise its interest rates sooner than expected.

A separate report from the U.S. Labor Department showed that the number of Americans filing for unemployment benefits had fallen by 1,0000, marking the nation’s second straight week of decline in unemployment claims.

The data helped fuel speculation that the U.S. labor market’s unexpectedly rapid comeback could prompt the Fed to raise its main interest rate soon after ending its quantitative easing program.

Meanwhile the euro floundered as investors worried about the state of the region’s economy, especially as the situation in Ukraine worsened. Kiev has accused Russia of sending military aid across the nation’s eastern borders, which in turn has contributed to the pro-Russian separatists’ forward momentum.

With the conflict between Russia and Ukraine still tense, the sanctions standoff between Moscow and the West is unlikely to let up, which will in turn hurt the eurozone economy further.

Moving forward, investors will be watching for eurozone inflation data due out later in the day. The figures are expected to show that consumer prices in the bloc fell again, something which will likely fuel speculation that the European Central Bank will ease further next week.

Editor’s Note: Equity investors/traders can use the Currency Shares Euro Trust (FXE, quote) ETF to take positions in the euro without a FOREX account.  The ETF looks to track the price of the euro (EURUSD), minus ETF fee. The fund seeks to reflect the price of the euro with the shares representing a cost-effective investment relative to investing in the FOREX market.

Content courtesy of Benzinga written by Laura Brodbeck, Benzinga Staff Writer