Forex - EUR/USD gains on disappointing U.S. home sales data
Published Oct 24, 2014 11:33AM ET
Euro firms as dollar rally takes a breather on soft U.S. home sales data
Investing.com - The euro firmed against a softer dollar on Friday after data revealed that U.S. new home sales rose less than expected last month, which sent investors recalibrating timetables outlining when the Federal Reserve may raise interest rates next year.
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In U.S. trading, EUR/USD was up 0.21% at 1.2674, up from a session low of 1.2635 and off a high of 1.2695.
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The pair was likely to find support at 1.2612, Thursday's low, and resistance at 1.2840, Tuesday's high.
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The dollar dipped after the Census Bureau reported earlier that U.S. new home sales rose 0.2% in September to 467,000 units, missing expectations for an increase to 470,000 units.
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The August figure was downwardly revised to a 15.3% climb to 466,000 units from a previously estimated 18.0% jump to 504,000 units, and the data weakened the dollar against the euro, as while the Federal Reserve is widely seen closing its bond-buying program this month, the timing of rate hikes in 2015 remains unclear.
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Still, the dollar didn't plunge, as a longer-range view of economic indicators still points to a sustained U.S. recovery, including in the housing sector.
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Earlier in the week, the National Association of Realtors reported that U.S. existing home sales increased 2.4% to a 5.17 million units last month from 5.05 million in August. Analysts had expected existing home sales to rise 1% to 5.10 million units in September.
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Meanwhile in Europe, upbeat homegrown data gave the euro added support.
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The Gfk German consumer climate index rose to 8.5 in October from 8.4 in September, whose figure was revised up from a previously estimated reading of 8.3.
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Analysts had expected the index to fall to 8.0 this month.
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The single currency had also found support on Thursday after data showed that the euro zone saw a marginal uptick in business activity in October.
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Research group Markit Economics reported that its preliminary manufacturing purchasing managers’ index for the euro area ticked up to 50.7 this month from a final reading of 50.3 in September. Analysts had expected the index to slide to 49.9.
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The service-sector PMI held steady at 52.4, slightly above expectations of 52.0.
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Elsewhere, the euro was down against the pound, with EUR/GBP down 0.13% at 0.7879, and up against the yen, with EUR/JPY up 0.08% at 137.04.
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In a preliminary report, the Office for National Statistics said U.K. gross domestic product rose 0.7% in the third quarter, in line with expectations, after a 0.9% increase in the three months to June.
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Year-on-year, Britain's GDP rose at an annualized rate of 3.0% in the last quarter, also in line with expectations, down from a 3.2% growth rate in the second quarter.
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Written By: Investing.com
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