Investing.com - The euro softened against a strengthening dollar on Friday after investors applauded data revealing U.S. consumer sentiment made its biggest leap since July of 2007.
In U.S. trading, EUR/USD was down 0.41% at 1.2756, up from a session low of 1.2745 and off a high of 1.2836.
The pair was likely to find support at 1.2623, Wednesday's low, and resistance at 1.2886, Wednesday's high.
The Thomson Reuters/University of Michigan preliminary consumer sentiment index rose to a seven-year high 86.4 for October from 84.6 in September. Analysts had expected the index to slip to 84.1 in October, and the surprise firmed the dollar and eclipsed mixed housing data.
The Census Bureau reported earlier that U.S. building permits rose 1.5% to 1.018 million in September, disappointing expectations for an increase of 2.8% to 1.0.29 million units, after a 5.1% drop to 1.003 million units in August.
The report also showed that U.S. housing starts rose 6.3% in September to 1.017 million units, beating expectations for a 4.8% gain. Housing starts for August were revised to a 12.8% fall from a previously estimated 14.4% decline.
Meanwhile, the euro continued to come under pressure amid growing concerns over the threat of deflation in the euro zone after revised data on Thursday showed that bloc's consumer price inflation rose by 0.3% in September, in line with expectations though soft nonetheless.
The rate has now been below 1% for 12 straight months, well under the European Central Bank's target of near but just under 2%.
Elsewhere, the euro was down against the pound, with EUR/GBP down 0.41% at 0.7930, and down against the yen, with EUR/JPY down 0.05% at 136.14.