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Forex - EUR/USD holds gains after tepid U.S. economic reports

Published 12/23/2013, 10:04 AM
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Investing.com - The euro held gains against the U.S. dollar in holiday-thinned trade on Monday, after the release of tepid U.S. economic reports as trading volumes remained light ahead of the Christmas holiday.

EUR/USD 1.3706 during U.S. morning trade, the pair's highest since Friday; the pair subsequently consolidated at 1.3698, edging up 0.19%.

The pair was likely to find support at 1.3650, the low of December 19 and resistance at 1.3745, the high of December 9.

The University of Michigan's said its index of overall consumer sentiment held at 82.5 this month, unchanged from an initial estimate. Analysts had expected the index to be revised up to 83.0.

The Michigan consumer sentiment index stood at 75.1 in November.

The report came after the Bureau of Economic Analysis said that U.S. personal spending rose 0.5% last month, matching expectations. Personal spending for October was revised up to a 0.4% gain from a previously reported increase of 0.3%.

The report also showed personal income rose 0.2% in November, missing expectations for a 0.5% increase, after falling by 0.1% in October.

The greenback had strengthened broadly last week after the Federal Reserve announced that it would reduce its USD85 billion-a-month bond buying program by USD10 billion in January. Outgoing Fed Chairman Ben Bernanke said the economy was continuing to make progress.

The U.S. central bank reiterated that interest rates are likely to remain low even after the unemployment rate drops below 6.5%, the threshold at which the Fed has previously said it would start to consider rate increases.

The euro was also higher against the pound, with EUR/GBP edging up 0.12% to 0.8382.


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