Investing.com - The euro was hovering near eight-week highs against the U.S. dollar on Tuesday, as upbeat euro zone economic reports continued to support demand for the single currency, while a disappointing U.S. trade report weakened the greenback.
EUR/USD hit 1.3951 during U.S. morning trade, the pair's highest since March 13; the pair subsequently consolidated at 1.3935, gaining 0.43%.
The pair was likely to find support at 1.3865, Monday's low and resistance at 1.3966.
The single currency remained supported after official data earlier showed that euro zone retail sales rose 0.3% in March, confounding expectations for a 0.2% fall. Retail sales in February were revised down to a 0.1% gain from a previously estimated 0.4% increase.
The report came after official data showed that the number of unemployed people in Spain dropped by 111,600 in April, compared to expectationd for a decline of 49,100, after a 16,600 fall the previous month.
Separately, Markit research group said that Spain's services purchasing managers' index rose to a six-year high of 56.5 last month, from a reading of 54.0 in March. Analysts had expected the index to tick up to 54.4 in April.
Italy's services PMI swung back into expansion territory last month, rising to 51.1 from a reading of 49.5 in March, beating expectations for an uptick to 50.4.
In the U.S., official data showed that the trade deficit narrowed to $40.38 billion in March, from $41.87 billion in February, whose figure was revised from a previously estimated deficit of $42.30 billion. Analysts had expected the trade deficit to narrow to $40.30 billion in March.
The euro was lower against the pound, with EUR/GBP sliding 0.30% to 0.8201.
Demand for sterling strengthened after Markit said the U.K. services PMI rose to a four-month high of 58.7 last month, from a reading of 57.6 in March. Analysts had expected the index to remain unchanged in April.
The upbeat data added to expectations the Bank of England could raise borrowing costs ahead of other central banks.