Forex - EUR/USD pushes higher on mixed U.S. data, ECB optimism

Investing.com - The euro pushed higher against the U.S. dollar Tuesday, as mixed U.S. data depressed the greenback and single currency sentiment was lifted by optimism that the European Central Bank will intercede to manage the region’s debt crisis.

EUR/USD hit 1.2330 during U.S. trade, the pair’s highest since Friday; the pair subsequently consolidated at 1.2311, advancing 0.42%

The pair was likely to find near-term support at 1.2224 Monday’s low and short-term resistance at 1.2389, last Thursday’s high.

Helping the greenback, a report showed that the Chicago purchasing managers’ index rose to 53.7 in July from a reading of 52.9 in June and defying expectations for a decline to 52.5.

In addition, the Conference Board said that its index of U.S. consumer confidence rose to 65.9 in July, from 62.7 in the preceding month, beating expectations for a reading of 61.5.

However, a  separate report showed that U.S. personal spending was flat in June, in line with expectations, while personal income rose 0.5%, slightly better than expectations for a 0.4% increase.

Overall market sentiment remained muted amid expectations for the Federal Reserve and the ECB to ease monetary policy this week, in an attempt to spur economic growth in the U.S. and stem the long running debt crisis in the euro zone.

Expectations that the ECB is set to announce bold measures to tackle the debt crisis have been mounting after the bank’s head Mario Draghi pledged last week to do whatever is necessary to preserve the euro.

Although investors remained wary amid concerns that an inadequate policy response by the ECB could send markets lower.

Market participants were also eyeing the outcome of the Federal Reserve’s policy setting meeting on Wednesday, amid speculation over whether the U.S. central bank will indicate if further quantitative easing measures are imminent.

The euro was sharply higher against the broadly weaker pound, with EUR/GBP surging 0.60% to 0.7851 and pushed higher against the yen, with EUR/JPY up 0.32% to 96.16.

The euro was little changed earlier after official data showed that the rate of consumer price inflation in the euro zone remained steady at 2.4% in July.

A separate report showed that the unemployment rate in the bloc rose to 11.2%, a new record high in July.

Germany’s unemployment rate remained steady at 6.8% in July, but Italy’s unemployment rate rose to 10.8% in June, the highest level since quarterly records started in 1999.