The euro was trading with insignificant change against the US dollar on Tuesday, while the greenback remained supported on optimism about the series of data, scheduled for release later this week out of the United States.
EUR/USD slid from its highest point today at 1.3315, recorded at 6:26 GMT, to trade at 1.3293 at 7:18 GMT, dipping 0.06% daily. Support for the pair was expected at August 12th low, 1.3276, while resistance was to be met at August 12th high, 1.3343.
Earlier today it became clear that rising food prices caused the final annual reading of the consumer price index in Germany reach the highest level since December 2012 in July. Monthly inflation of consumer prices rose by 0.5% in July, in line with expectations. The annual rate of consumer inflation increased for the third consecutive month in July by 1.9%, from 1.8% in June, again meeting initial estimates. Annual inflation in April stood at 1.2%. Food prices in the country reached their highest levels since September 2008, as they rose by 5.7% in July 2013 compared to July 2012.
Later on Tuesday the ZEW institute was to release data on the index of economic sentiment, index of current situation for Germany and the Euro zone, while another report will show the performance of the index of industrial production in the single currency zone.
In the mean time, the US dollar firmed its positions against peers on Monday ahead of the retail sales report out of the United States today, which may provide clues that economic recovery was on its way and the Federal Reserve may begin tapering its bond purchases.
“Forward expectations are certainly helping the dollar to push sharp gains,” Ravi Bharadwaj, a senior market analyst in Washington at Western Union Business Solutions, a unit of Western Union Co., said in a phone interview, cited by Bloomberg. “Market participants are hyper-sensitive to data right now, so you’d expect a strong dollar reaction if there’s a deviation from what investors have predicted. There’s also been a bit of profit-taking.”
Elsewhere, the euro was slightly losing ground against the sterling, as EUR/GBP cross dipped 0.07% to trade at 0.8598 at 7:34 GMT. On the other hand, the common currency soared versus the Japanese yen, with EUR/JPY pair advancing 0.78% to trade at 129.90 at 7:35 GMT.
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