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Forex - EUR/USD edges lower on strong U.S. data, Draghi

Published 05/27/2014, 10:20 AM
Euro slips lower against dollar, Draghi remarks weigh
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Investing.com - The euro edged lower against the U.S. dollar on Tuesday, as upbeat U.S. economic reports lent support to the greenback, while fresh comments by European Central Bank President Mario Draghi pressured the single currency.

EUR/USD hit 1.3626 during U.S. morning trade, the session low; the pair subsequently consolidated at 1.3631, slipping 0.11%.

The pair was likely to find support at 1.3585, the low of February 13 and resistance at 1.3687, the high of May 22.

In a report, the Conference Board said its index of consumer confidence rose to 83.0 this month from a reading of 81.7 in April, whose figure was revised down from a previously reported 82.3.

The data came after Standard & Poor’s with Case-Shiller said its house price index rose at an annualized rate of 12.4% in March from a year earlier, compared to forecasts for a gain of 11.8% and following a rise of 12.9% in February.

Data also showed that U.S. core durable goods orders, which exclude transportation items, rose 0.1% last month, below expectations for a 0.3% increase. Core durable goods orders in March were revised up to a 2.9% gain from a previously estimated 2.4% rise.

U.S. durable goods orders rose 0.8% in April, confounding expectations for a 0.5% fall, after a 3.6% increase in March, whose figure was revised up from a previously estimated 2.9% rise.

Meanwhile, sentiment on the euro remained fragile after ECB President Draghi said the bank will do everything feasible for the euro zone economy within its mandate, fuelling fresh expectations for additional easing measures.

On Monday, Mario Draghi said the ECB is ready to act should it see signs of a negative inflation spiral taking hold, and indicated that the bank is weighing a wide range of policy options, including interest rate cuts, and liquidity injections or broad-based asset purchases to help shore up the fragile recovery in the euro area.

Draghi was speaking at the new ECB annual conference in Sintra, Portugal.

Sterling was steady against the euro, with EUR/GBP inching up 0.06% to 0.8106.

Also Tuesday, industry data showed that U.K. mortgage approvals rose by 42,200 last month, compared to expectations for a 45,200 increase. Mortgage approvals in March were revised down to a 45,000 rise from a previously estimated 45,900 increase.

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