Investing.com - The dollar took back earlier losses against the euro on Wednesday after U.S. consumer sentiment and weekly jobless claims reports beat expectations, which brought in bottom fishers who snapped up nicely priced greenback positions.
A soft consumer confidence report released on Tuesday weakened the U.S. currency by fanning ongoing expectations for the Federal Reserve to keep its dollar-weakening monetary stimulus programs in place through early 2014.
Stimulus tools such as the Fed's USD85 billion in monthly bond purchases aim to drive recovery by pushing down long-term interest rates, weakening the dollar as long as they remain in effect.
In U.S. trading on Wednesday, EUR/USD was up 0.07% at 1.3582, up from a session low of 1.3558 and off from a high of 1.3613.
The pair was likely to find support at 1.3490, Monday's low, and resistance at 1.3818, the high from Oct. 28.
The dollar saw support earlier after the University of Michigan said its index of overall consumer sentiment was revised up to 75.1 in November from a preliminary estimate of 72.0.
Economists had expected the index to be revised up to 73.5.
The report was released two days in advance due to the U.S. Thanksgiving holiday on Thursday.
Also on Wednesday, the Department of Labor said the number of individuals filing for initial jobless benefits last week declined by 10,000 to a two-month low of 316,000. Economists had forecast an increase of 4,000.
The jobs data was released one day early due to the U.S. holiday.
The upbeat data offset a report showing that U.S. durable goods orders fell 2% in October, worse than expectations for a 1.9% decline, while core durable goods orders were down 0.1%, compared to expectations for a 0.5% increase.
Wednesday's data kept expectations going that the Federal Reserve will announce plans to taper stimulus likely in early 2014, though the month of the start date remained unclear.
On Tuesday, the Conference Board reported that its index of U.S. consumer confidence declined to 70.4 in November from 72.4 in October.
Analysts were expecting the index to rise to 72.9 this month, and the disappointing reading weakened demand for the dollar by clouding forecasts as to when the Fed will scale back monthly bond purchases.
Meanwhile in Europe, the euro rose after data showed that the forward looking Gfk index of German consumer climate rose to a six year high of 7.4 for December from 7.1 in November. Economists had expected an unchanged reading.
The euro saw additional support after German Chancellor Angela Merkel reached a deal to form a coalition government with the Social Democrats on Wednesday, following weeks of negotiations.
The single currency was down against the pound and up against the yen, with EUR/GBP trading down 0.37% at 0.8339 and EUR/JPY trading up 0.80% at 138.57.
On Thursday in the euro zone, Germany is to release preliminary data on consumer inflation, in addition to data on the change in the number of people unemployed.
U.S. markets will be closed for the Thanksgiving holiday.
A soft consumer confidence report released on Tuesday weakened the U.S. currency by fanning ongoing expectations for the Federal Reserve to keep its dollar-weakening monetary stimulus programs in place through early 2014.
Stimulus tools such as the Fed's USD85 billion in monthly bond purchases aim to drive recovery by pushing down long-term interest rates, weakening the dollar as long as they remain in effect.
In U.S. trading on Wednesday, EUR/USD was up 0.07% at 1.3582, up from a session low of 1.3558 and off from a high of 1.3613.
The pair was likely to find support at 1.3490, Monday's low, and resistance at 1.3818, the high from Oct. 28.
The dollar saw support earlier after the University of Michigan said its index of overall consumer sentiment was revised up to 75.1 in November from a preliminary estimate of 72.0.
Economists had expected the index to be revised up to 73.5.
The report was released two days in advance due to the U.S. Thanksgiving holiday on Thursday.
Also on Wednesday, the Department of Labor said the number of individuals filing for initial jobless benefits last week declined by 10,000 to a two-month low of 316,000. Economists had forecast an increase of 4,000.
The jobs data was released one day early due to the U.S. holiday.
The upbeat data offset a report showing that U.S. durable goods orders fell 2% in October, worse than expectations for a 1.9% decline, while core durable goods orders were down 0.1%, compared to expectations for a 0.5% increase.
Wednesday's data kept expectations going that the Federal Reserve will announce plans to taper stimulus likely in early 2014, though the month of the start date remained unclear.
On Tuesday, the Conference Board reported that its index of U.S. consumer confidence declined to 70.4 in November from 72.4 in October.
Analysts were expecting the index to rise to 72.9 this month, and the disappointing reading weakened demand for the dollar by clouding forecasts as to when the Fed will scale back monthly bond purchases.
Meanwhile in Europe, the euro rose after data showed that the forward looking Gfk index of German consumer climate rose to a six year high of 7.4 for December from 7.1 in November. Economists had expected an unchanged reading.
The euro saw additional support after German Chancellor Angela Merkel reached a deal to form a coalition government with the Social Democrats on Wednesday, following weeks of negotiations.
The single currency was down against the pound and up against the yen, with EUR/GBP trading down 0.37% at 0.8339 and EUR/JPY trading up 0.80% at 138.57.
On Thursday in the euro zone, Germany is to release preliminary data on consumer inflation, in addition to data on the change in the number of people unemployed.
U.S. markets will be closed for the Thanksgiving holiday.