Investing.com - The euro trimmed gains against the U.S. dollar on Tuesday, as concerns over the financial crisis in the euro zone weighed on investor sentiment, despite a flurry of better-than-expected economic data earlier in the day.
EUR/USD pulled away from 1.2807, the pair’s highest since Friday, to hit 1.2723 during U.S. morning trade, still up 0.45% on the day.
The pair was likely to find support at 1.2625, Monday’s low and a 16-month trough and resistance at 1.2844, last Thursday’s high.
The single currency strengthened broadly earlier after the ZEW Centre said that its index of German business sentiment recorded its largest ever monthly increase in January, indicating that the euro zone’s largest economy is performing strongly despite the effects of the region’s debt crisis.
A separate report showed that consumer price inflation in the single currency bloc rose less-than-expected in December, advancing 2.7% after a 2.8% rise the previous month, allowing the European Central Bank more leeway to ease monetary policy.
Elsewhere, Spain auctioned EUR4.9 billion of short-term government debt at sharply lower yields, indicating that investor sentiment has not been hit by last week’s sovereign ratings downgrade.
Risk appetite had been bolstered earlier after better-than-forecast data on Chinese fourth quarter growth eased concerns over the outlook for global economic growth.
But the single currency remained vulnerable after Standard & Poor’s downgraded the triple-A rating of the euro zone’s bailout fund by one notch on Monday, following Friday’s downgrade of nine euro zone sovereigns, including France.
Meanwhile, talks aimed at negotiating a restructuring of Greece’s debts remained deadlocked, amid disagreements over a bond swap with private creditors.
The euro also trimmed gains against the pound, with EUR/USD up 0.32% to trade at 0.8293, off an earlier high of 0.8322.
Also Tuesday, an index of manufacturing conditions in New York improved more-than-expected in January, climbing to the highest level since April.
The Federal Reserve Bank of New York said that its general business conditions index improved by 4.0 points to 13.5 in January from 9.5 in December.
Analysts had expected the index to improve by 1.0 point to 10.5 in January.
EUR/USD pulled away from 1.2807, the pair’s highest since Friday, to hit 1.2723 during U.S. morning trade, still up 0.45% on the day.
The pair was likely to find support at 1.2625, Monday’s low and a 16-month trough and resistance at 1.2844, last Thursday’s high.
The single currency strengthened broadly earlier after the ZEW Centre said that its index of German business sentiment recorded its largest ever monthly increase in January, indicating that the euro zone’s largest economy is performing strongly despite the effects of the region’s debt crisis.
A separate report showed that consumer price inflation in the single currency bloc rose less-than-expected in December, advancing 2.7% after a 2.8% rise the previous month, allowing the European Central Bank more leeway to ease monetary policy.
Elsewhere, Spain auctioned EUR4.9 billion of short-term government debt at sharply lower yields, indicating that investor sentiment has not been hit by last week’s sovereign ratings downgrade.
Risk appetite had been bolstered earlier after better-than-forecast data on Chinese fourth quarter growth eased concerns over the outlook for global economic growth.
But the single currency remained vulnerable after Standard & Poor’s downgraded the triple-A rating of the euro zone’s bailout fund by one notch on Monday, following Friday’s downgrade of nine euro zone sovereigns, including France.
Meanwhile, talks aimed at negotiating a restructuring of Greece’s debts remained deadlocked, amid disagreements over a bond swap with private creditors.
The euro also trimmed gains against the pound, with EUR/USD up 0.32% to trade at 0.8293, off an earlier high of 0.8322.
Also Tuesday, an index of manufacturing conditions in New York improved more-than-expected in January, climbing to the highest level since April.
The Federal Reserve Bank of New York said that its general business conditions index improved by 4.0 points to 13.5 in January from 9.5 in December.
Analysts had expected the index to improve by 1.0 point to 10.5 in January.