Investing.com - The euro fell to fresh two-year lows against the U.S. dollar in quiet trade on Tuesday, as investors eyed an upcoming report on Spanish inflation and as demand for the greenback remained broadly supported.
Trading volumes were expected to remain light ahead of the New Year's holiday.
EUR/USD hit 1.2124 during late Asian trade, the pair's lowest since July 2012; the pair subsequently consolidated at 1.2141, edging down 0.12%.
The pair was likely to find support at 1.2040 and resistance at 1.2228, the high of December 26.
The dollar remained broadly supported after final data last week 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.
The strong data fuelled further optimism over the strength of the U.S. economic recovery and added to expectations for the Federal Reserve to raise interest rates next year.
Separately, market sentiment was hit on Monday after Greek Prime Minister Antonis Samaras said that he will recommend parliamentary elections are held on January 25, almost 18 months before his coalition's term was due to end.
The announcement came as Samaras failed in his third attempt to persuade lawmakers to back his candidate for head of state, forcing the legislature’s dissolution.
The euro was steady against the pound, with EUR/GBP dipping 0.06% to 0.7827.