Investing.com - The euro hit session lows against the U.S. dollar on Tuesday, after data showed that German economic sentiment deteriorated to the lowest level since December 2012 this month and as lower than expected euro zone industrial production data weighed.
EUR/USD hit 1.2640 during European early afternoon trade, the session low; the pair subsequently consolidated at 1.2647, declining 0.82%.
The pair was likely to find support at 1.2582, the low of October 7 and resistance at 1.2792, the high of October 9.
In a report, the ZEW Centre for Economic Research said that its index of German economic sentiment fell by 10.5 points to minus 3.6 this month from September’s reading of 6.9. Analysts had expected the index to decline by 5.9 points to 1.0 in October.
The index of euro zone economic sentiment plunged to 4.1 in September from 14.2 in August, below expectations for a decline to 7.1.
A separate report showed that industrial production in the euro zone declined 1.8% in August, confounding expectations for a 1.6% fall. July's figure was revised to a 0.9% rise from a previously estimated 1.0% increase.
Year-on-year, industrial production fell 1.9% in August from a year earlier, compared to expectations for a 0.9% decline and after rising at a rate of 1.6% the previous month.
The safe-haven dollar remained supported after the International Monetary Fund cut its forecasts for global growth in 2014 and 2015 last week and warned that global growth may never reach its pre-crisis levels ever again.
Markets were also jittery amid the widening Ebola epidemic. The U.K. announced on Monday that it will begin conducting fever tests for Ebola at Heathrow airport, after Health Secretary Jeremy Hunt said it is likely that the virus will be diagnosed in the U.K. by end of year.
The euro was steady against the pound, with EUR/GBP inching up 0.03% to 0.7929.
In the U.K., data on Tuesday showed that inflation data slowed to a five-year low in September.
The U.K. Office for National Statistics said the rate of consumer price inflation slowed to 1.2% last month from 1.5% in August. Analysts had expected U.K. CPI to fall to 1.4% in September.
Core CPI, which excludes food, energy, alcohol, and tobacco costs rose at a rate of 1.5% last month, down from 1.9% in August. Analysts had expected core prices to rise 1.8% in September.