Investing.com - The euro backed off session lows against the dollar on Tuesday after data showed that U.S. retail sales rose at a slower than forecast pace in April, but the prospect of fresh easing by the European Central Bank continued to weigh on the single currency.
EUR/USD was last trading at 1.3715, down 0.31% for the day after falling as low as 1.3699 earlier, the weakest level since April 7.
The pair was likely to find support at 1.3685 and resistance at 1.3770, the session high.
The euro pared back losses after the Commerce Department reported that U.S. retail sales rose just 0.1% last month, missing expectations for a 0.4% increase. Retail sales for March were revised up to a 1.5% gain from a previously reported increase of 1.2%.
Rising retail sales over time correlate with stronger economic growth, while weaker sales signal a declining economy.
Core retail sales, which exclude automobile sales, were flat in April, disappointing forecasts for a 0.6% increase. Core sales in March were revised up to a rise of 1% from a previously reported increase of 0.7%
The euro fell to session lows against the dollar earlier following reports that Germany’s Bundesbank is open to more stimulus measures from the ECB.
The Wall Street Journal reported the German central bank would back monetary easing measures if they were needed to keep persistently low levels of inflation from becoming entrenched in the euro zone.
The ECB warned last week that it is “comfortable” with acting at its next meeting in June after it has a chance to review the latest economic projections.
The single currency also came under pressure after data showed that German economic sentiment slumped to a 16-month low in May.
The ZEW Centre for Economic Research reported that its index of German economic sentiment dropped to 33.1 this month from 43.2 in April. Analysts had expected a reading of 41.0.
The current conditions index improved to 62.1 from 59.5 in April, ahead of expectations of 60.5.
Elsewhere, the euro was at session lows against the yen, with EUR/JPY trading at 140.07. The single currency was trading close to 16-month lows against sterling, with EUR/GBP sliding 0.13% to 0.8144.