Forex - EUR/USD higher on weak U.S. data, easing euro zone debt worries

Investing.com -   Easing debt worries pushed the single currency higher against the U.S. dollar Tuesday,  as weaker-than-expected U.S. housing and consumer confidence numbers weighed on the greenback.

EUR/USD hit 1.1.3218 during U.S. during U.S. trade, the pair’s highest since Friday; the pair subsequently consolidated at 1.3202, gaining 0.36%.

The pair was likely to find support at 1.3104, Monday’s low and short-term resistance at 1.3226, Friday’s high and a two-week high.

Sparking the risk-on euro trade,  data indicated that U.S. new home sales fell less-than-expected in March, while the previous month’s figure was revised higher.

The U.S. Census Bureau said new home sales fell by 7.1% to a seasonally adjusted 328,000 units in March, compared to expectations for a decline to 320,000.

New home sales for February were revised up to 353,000 units from a previously reported 313,000 units.

The data came on the heels of an industry report showing that U.S. home prices fell to the lowest level since 2002 in February.

Standard & Poor’s Case-Shiller house price index gave back an annualized rate of 3.5% in February from a year earlier, compared to expectations for a 3.4% decline.

Month-on-month, U.S. home prices dipped 0.8% in February, worse than expectations for a modest 0.2% decline.  

Another report showed that U.S. consumer confidence fell unexpectedly in April, moving further off February’s 12-month high.

The Conference Board, a market research group said its index of consumer confidence ticked down to 69.2 from a downwardly revised reading of 69.5 in March. Analysts had expected the index to ease up to 69.7 in April.

Easing euro zone debt worries, the single currency remained supported after an auction of Dutch government debt earlier in the day met with solid investor demand, but fears that the country could lose its triple-A credit rating lingered following the collapse of the government on Monday.

Sentiment on the shared currency also remained fragile after an auction of Spanish bills saw the country’s short-term borrowing costs almost double.

The auction came one day after the Bank of Spain confirmed that country’s economy entered a recession in the first quarter, with gross domestic product contracting by 0.4% in the three months to March, following a contraction of 0.3% in the fourth quarter.

Meanwhile, Italy auctioned EUR3.34 billion of government bonds at the highest costs since January.

The euro pushed higher against the pound and the yen, with EUR/GBP adding 0.33% to hit 0.8182 and EUR/JPY climbing 0.37% to hit 107.19.

Also Tuesday, official data showed that industrial new orders in the euro zone dropped more-than-expected in February, tumbling for the second consecutive month.