Forex - EUR/USD steady on weak U.S. data, Spanish debt sales

Published 04/24/2012, 07:59 PM
Updated 04/24/2012, 08:00 PM
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Investing.com - The euro held onto earlier gains against the dollar Wednesday as markets brushed off political concerns stemming from French elections and bought the pair on turnout in Spanish government debt auctions as well as on sluggish U.S. housing and confidence data.

In Asian trading on Wednesday, EUR/USD was trading at 1.3196, down 0.01%, up from a session low of 1.3192 and off from a high of 1.3203.

The pair was likely to find support at 1.2996, the low on April 16, and resistance at 1.3228, the high of April 20.

Markets looked beyond recent French elections, where French President Nicolas Sarkozy trailed Socialist challenger François Hollande, leaving both candidates heading to a May 6 runoff.

Demand at Dutch bond auction was solid despite a near government collapse over budgetary impasses, while Spain and Italy sold bonds as well, which bolstered the euro.

While financial concerns continue in Europe, weak data out of the U.S. spooked investors away from the dollar and towards a nicely priced euro.

The Standard & Poor’s/Case-Shiller house price index fell at an annualized rate of 3.5% in February from a year earlier, worse than expectations for a 3.4% decline.

New home sales in the U.S. fell by 7.1% to a seasonally adjusted 328,000 units in March, and while slightly better than expectations for a reading of 320,000, the number was not enough to prevent investors from selling the greenback to invest elsewhere.

Consumer confidence, meanwhile, slipped in the world's largest economy as well.

The Conference Board reported that its consumer confidence index fell to 69.2 in April from a downwardly revised reading of 69.5 in March and further below a 12-month high in February.

Analysts were hoping the index would rise to 69.7 in April.

Weak data and successful debt auctions in Europe gave investors reason to snap up nicely-priced euro positions albeit in choppy trading.

The euro, meanwhile, was up against the pound and up against the yen, with EUR/GBP trading up 0.01% at 0.8175 and EUR/JPY up 0.12% and trading at 107.44.

All eyes will focus on the U.S. later Wednesday.
The U.S. is to publish government data on durable goods orders, a leading indicator of production, and another on crude oil stockpiles.

The Federal Reserve is to announce its decision on benchmark interest rate and release its rate statement.

Also Wednesday, U.S. Treasury Secretary Timothy Geithner is scheduled to speak.

In Europe, European Central Bank President Mario Draghi is scheduled to speak as well.






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