Investing.com - The euro held gains against the U.S. dollar on Tuesday, as stronger-than-expected economic data out of Germany lent support, but the single currency remained vulnerable amid concerns that Greece could exit the euro zone.
EUR/USD hit 1.2869 during European early afternoon trade, the session high; the pair subsequently consolidated at 1.2847, gaining 0.20%.
The pair was likely to find support at 1.2813, the session low and the pair’s lowest since January 18 and resistance at 1.2903, Monday’s high.
Sentiment on the euro firmed up after preliminary data showed that Germany’s economy expanded more-than-expected in the first quarter, indicating that the euro zone’s largest economy is weathering the effects of the crisis in the region.
Germany’s gross domestic product grew by a seasonally adjusted 0.5% in the three months to March, above expectations for a growth of 0.1%.
A separate report showed that the ZEW index of German economic sentiment deteriorated significantly more-than-expected this month, declining for the first time in six months.
The ZEW Centre for Economic Research said that its index of German economic sentiment declined to 10.8, from April’s reading of 23.4. Analysts had expected the index to decline to 19.0 in May.
Meanwhile, official data showed that the euro zone avoided a recession in the first quarter, as GDP growth remained flat, defying expectations for a contraction of 0.2%. The euro zone economy contracted by 0.3% in the fourth quarter of 2011.
But investors remained cautious amid fears that last ditch talks aimed at forming a government in Greece would fail after a more than week-long political stalemate fuelled fears over the country’s ability to uphold its financial commitments and its possible exit from the euro zone.
Greece’s GDP contracted at an annualized rate of 6.2% in the first three months of 2012, official data showed.
The euro was also higher against the pound and the yen, with EUR/GBP rising 0.45% to hit 0.8003 and EUR/JPY gaining 0.27% to hit 102.65.
Later in the day, the U.S. was to publish official data on retail sales and consumer price inflation, as well as a report on manufacturing activity in New York.
EUR/USD hit 1.2869 during European early afternoon trade, the session high; the pair subsequently consolidated at 1.2847, gaining 0.20%.
The pair was likely to find support at 1.2813, the session low and the pair’s lowest since January 18 and resistance at 1.2903, Monday’s high.
Sentiment on the euro firmed up after preliminary data showed that Germany’s economy expanded more-than-expected in the first quarter, indicating that the euro zone’s largest economy is weathering the effects of the crisis in the region.
Germany’s gross domestic product grew by a seasonally adjusted 0.5% in the three months to March, above expectations for a growth of 0.1%.
A separate report showed that the ZEW index of German economic sentiment deteriorated significantly more-than-expected this month, declining for the first time in six months.
The ZEW Centre for Economic Research said that its index of German economic sentiment declined to 10.8, from April’s reading of 23.4. Analysts had expected the index to decline to 19.0 in May.
Meanwhile, official data showed that the euro zone avoided a recession in the first quarter, as GDP growth remained flat, defying expectations for a contraction of 0.2%. The euro zone economy contracted by 0.3% in the fourth quarter of 2011.
But investors remained cautious amid fears that last ditch talks aimed at forming a government in Greece would fail after a more than week-long political stalemate fuelled fears over the country’s ability to uphold its financial commitments and its possible exit from the euro zone.
Greece’s GDP contracted at an annualized rate of 6.2% in the first three months of 2012, official data showed.
The euro was also higher against the pound and the yen, with EUR/GBP rising 0.45% to hit 0.8003 and EUR/JPY gaining 0.27% to hit 102.65.
Later in the day, the U.S. was to publish official data on retail sales and consumer price inflation, as well as a report on manufacturing activity in New York.