Forex - EUR/USD trims losses after U.S. existing home sales data

Published 09/19/2012, 10:09 AM
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Investing.com - The euro trimmed losses to trade little changed against the U.S. dollar during U.S. morning hours on Wednesday, after data showed that U.S. existing home sales rose well above expectations last month.

EUR/USD hit a session low of 1.2994 during U.S. morning trade, before subsequently consolidating at 1.3038, easing down 0.08%.

The pair was likely to find short-term support at 1.2979, the low of September 14 and resistance at 1.3085, the daily high.

The National Association of Realtors said in a report earlier that existing home sales in the U.S. rose by 7.8% to a seasonally adjusted 4.82 million units in August, easily surpassing expectations for a 2% increase to 4.55 million units.

Also Wednesday, official data showed that the number of housing starts in the U.S. rose less-than-expected in August, while building permits issued declined, adding to concerns over the U.S. housing sector.

In a report, the U.S. Census Bureau that U.S. housing starts rose by 2.3% in August to a seasonally adjusted 0.750 million, below expectations for a 2.85 increase to 0.765 million.

The report also showed that the number of building permits issued in August fell 1% to a seasonally adjusted 0.803 million, compared to expectations for a decline of 1.8% to 0.796 million.

The single currency came under pressure earlier after reports surfaced that some German lawmakers are seeking to water down proposals for a European banking union and supervision of euro zone banks by the European Central Bank.

Dow Jones Newswires reported that the German government not only wants a strict separation of bank supervision and monetary policy in Europe, but also favors a separate bank-supervision body that would give large countries more votes.

Sentiment also remained vulnerable amid reports Spanish Prime Minister Mariano Rajoy is uncertain about asking for help from the European Central Bank's new bond-purchasing program, which would mean signing up to a permanent bailout fund.

Elsewhere, the euro was higher against the pound with EUR/GBP adding 0.11%, to hit 0.8041.

In the U.K., minutes of the Bank of England’s September meeting showed that policymakers voted unanimously to leave policy unchanged.

BoE policymakers voted 9 to zero in favor of leaving U.K. interest rates unchanged at 0.5% at its meeting this month and also agreed to leave the quantitative easing program unchanged at GBP375 billion.

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