Investing.com - The euro regained ground against the dollar on Tuesday, after falling to session lows earlier when European Central Bank Vice President Vitor Constancio said markets had missed some parts of its message on forward guidance last week.
EUR/USD was trading at 1.3870, holding below the two-and-a-half year peaks of 1.3915 struck last week. The pair fell to lows of 1.3834 earlier Tuesday.
The pair was likely to find support at 1.3800 and resistance at 1.3877, the session high.
The euro moved lower after Constancio said the bank made its forward guidance on the existence of slack in the euro zone economy more precise at last week’s meeting, but this was not picked up by markets.
"The forward guidance was made more precise in relation to the existence of this slack. Unfortunately ... this was not picked up by the markets," he said.
He also said the central bank still had policy options available, including lower interest rates or quantitative easing, if necessary.
The euro has strengthened broadly since the ECB refrained from implementing any new measures to shore up growth last week, despite forecasting below target inflation for the next few years.
The euro also trimmed losses against the yen, with EUR/JPY dipping 0.06% to 143.21, moving off lows of 142.83.
Overall market sentiment recovered somewhat on Tuesday, following a selloff in risk assets in the previous session after unexpectedly weak trade data out of China sparked fresh concerns over the strength of the world’s second-largest economy.
Markets were also warily eyeing the ongoing standoff between Russia and the West over Ukraine.