Investing.com - The euro moved higher against the dollar on Tuesday after a widely-watched gauge of U.S. consumer confidence missed expectations and sent investors rethinking the pace at which the Federal Reserve will dismantle monetary stimulus tools that weaken the greenback to spur recovery.
In U.S. trading, EUR/USD was trading at 1.3748, up 0.09%, up from a session low of 1.3716 and off a high of 1.3767.
The pair was likely to find support at 1.3708, Monday's low, and resistance at 1.3773, Monday's high.
The dollar softened after the Conference Board reported that its consumer confidence index slipped to 78.1 in February from 79.4 in January, mainly due to concerns over general business conditions, jobs, and earnings.
Analysts were expecting the index to tick up to 80.0.
The present situation index rose to its highest level in almost six years, but the expectations index declined, indicating that while consumers believe the economy has improved they do not foresee further considerable improvement in the coming months.
The dollar weakened as investors speculated that the Federal Reserve will very gradually taper its $65 billion monthly bond-buying program, which weakens the dollar by suppressing long-term borrowing costs to spur recovery.
Also on Tuesday, the Standard & Poor’s/Case-Shiller house price index rose 13.4% in December from a year earlier, the best December reading in eight years and slightly ahead of forecasts for a 13.3% gain.
Meanwhile in Europe, the European Commission revised up its growth forecast for the euro zone to 1.2% this year, up from 1.1% in November, which bolstered the euro.
However, the European Commission also cut its inflation forecast for 2014 to 1% from 1.5% in November, and warned that debt levels in several countries will continue to climb.
Earlier Tuesday, official data confirmed that Germany’s economy grew 0.4% in the fourth quarter and expanded 1.3% on a year-over-year basis, as strong overseas demand bolstered exports.
The euro was down against the pound, with EUR/GBP slipping 0.14% to 0.8236, and down against the yen, with EUR/JPY trading down 0.23% at 140.47.
On Wednesday in the euro zone, Germany is to release a report on Gfk consumer climate.
The U.S. is to release data on new home sales, a leading indicator of demand in the housing market.