The euro was little changed against the US dollar on Tuesday, following the release of optimistic consumer confidence report from Germany, while markets remained edgy ahead of the meetings by the European Central Bank and the Federal Reserve.
EUR/USD hit a session low at 1.3246 at 3:41 GMT, after which consolidation followed at 1.3256. Support for the pair was expected at July 24th low, 1.3177, while resistance was to be encountered at June 20th high, 1.3300.
Earlier today a report by Gfk showed that German consumer confidence index advanced to a six-year high in August at 7.0, exceeding estimates of a value of 6.9, while in July the indicator stood at 6.8. Stable rate of increase in employment and moderate inflation rate in Germany were key factors behind consumer confidence. According to Gfk experts, private consumption is expected to be the main driving force to economic growth during 2013. The index, gauging confidence among consumers, marked its seventh consecutive monthly gain, reaching the highest value since September 2007.
Meanwhile, the US dollar received certain support on Monday, after the release of pending home sales report from the United States, which added to optimism over the possible short-term scale back of Federal Reserves Quantitative Easing. According to yesterdays data, pending home sales decreased at a smaller than projected pace in June, by 0.4% compared to 1.0%. The index jumped by 10.9% in June this year, compared to June 2012. However, Junes result showed a retreat from a six-year high, as in May sales showed a 5.8% advance, a revision down from a 6.7% rise previously.
Elsewhere, the euro was trading steadily against the British pound, as EUR/GBP cross ticked down a mere 0.01% to 0.8647 at 6:45 GMT. EUR/JPY pair was on positive ground, trading at 130.37 at 6:45 GMT, rising by 0.33% for the day.
Later on trading Tuesday Spain was expected to release data on the preliminary value of its Gross Domestic Product, while Germany will report its preliminary consumer price index. Additionally, the United States was to release a report on home prices in 20 large cities throughout the country, followed by another report by the Conference Board, regarding US consumer confidence.
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