Investing.com - The euro dropped to fresh two-year lows against the U.S. dollar on Tuesday, as data showed that U.S. consumer sentiment deteriorated less-than-expected in December and that the U.S. economy grew at a faster rate than anticipated in the third quarter.
Trading volumes were expected to remain light this week with many investors away for the Christmas holiday and ahead of the New Year's holiday.
EUR/USD 1.2165 during U.S. morning trade, the pair's lowest since August 2012; the pair subsequently consolidated at 1.2175, sliding 0.44%.
The pair was likely to find support at 1.2132 and resistance at 1.2305, the high of December 19.
In a revised report, the University of Michigan said its consumer sentiment index ticked down to 93.6 this month from a reading of 93.8 in November. Analysts expected the index to fall to 93.1 in December.
The University of Michigan also said its inflation expectations for the next 12 months slipped to 2.8% in December from 2.9% the previous month.
Separately, the U.S. Census Bureau said new home sales fell 1.6% last month to 438,000 units from a revised total of 445,000 units in October. Analysts had expected new home sales to hit 460,000 in November.
Data also showed that U.S. personal spending rose 0.6% in November, exceeding expectations for a 0.5% gain. U.S. personal spending rose 0.3% in October, whose figure was revised from a previously estimated 0.2% uptick.
The reports came after final data showed that U.S. gross domestic product rose 5.0% in the third quarter, exceeding expectations for a growth rate of 4.3% and up from 3.9% in the three months to June.
Another report showed that U.S. durable goods orders slipped 0.7% last month, confounding expectations for a 3.0% increase, after a 0.3% rise in October.
Core durable goods orders, which exclude transportation items, fell 0.4% in November after a 1.0% decline in October, whose figure was revised from a previously estimated 1.1% drop. Analysts had expected core durable goods orders to gain 1.1% last month.
In the euro zone, official data on Friday showed that French consumer spending rose 0.4% in November, beating expectations for a 0.3% gain, while a separate report showed that France's economy grew by 0.3% in the third quarter, in line with expectations.
The euro was higher against the pound, with EUR/GBP adding 0.15% to 0.7856.
Also Tuesday, the Office for National Statistics said the U.K. current account deficit widened to £27.0 billion in the third quarter from £24.3 billion in the second quarter, whose figure was revised from a previously estimated deficit of £23.1 billion.
A separate report showed that U.K. gross domestic product rose 0.7% in the third quarter, in line with expectations and down from a 0.8% growth rate in the three months to June.
Year-on-year, the U.K. economy grew at a rate of 3.6% in the last quarter, above expectations for growth of 3.0% and unchanged from the second quarter's revised rate, which had initially been estimated at 3.0%.
In addition, the British Bankers' Association reported that mortgage approvals rose by £36,700 in November, after an increase of £37,200 in October, whose figure was revised from a previously estimated £37,100 gain.