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Forex - EUR/USD holds gains after flurry of weak U.S. data

Published 05/31/2011, 10:16 AM
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Investing.com – The euro held gains against the U.S. dollar on Tuesday, as concerns over a possible Greek debt default eased and after a flurry of weaker-than-expected U.S. data weighed on the greenback.

EUR/USD hit 1.4424 during early U.S. trade, the pair’s highest since May 9; the pair subsequently consolidated at 1.4397, surging 0.81%.

The pair was likely to find support at 1.4124, last Friday’s low and resistance at 1.4587, the high of May 6.

Earlier in the day, the Wall Street Journal reported that Germany may consider abandoning a push to reschedule Greek debt early, which may pave the way for Greece to receive a new package of financial aid.

The European Union is drafting a second bailout package for Greece to release vital loans next month and avert the risk of it defaulting.

Meanwhile, private sector data showed that U.S. house prices fell more-than-expected in March, declining for the ninth consecutive month.

The S&P/Case-Shiller home price index fell by 3.6% in March, slightly more than the expected 3.4% decline.

Separate reports showed that manufacturing activity in the Chicago area fell significantly more-than-expected last month, while U.S. consumer confidence unexpectedly declined.

The euro was also higher against the pound, with EUR/GBP advancing 0.76% to hit 0.8735.

The single currency shrugged off official data showing that consumer price inflation in the euro zone declined unexpectedly in May to a seasonally adjusted 2.7%. Analysts had expected CPI to remain unchanged at 2.8% in May.



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