Forexpros – The euro erased modest gains against the U.S. dollar on Tuesday, re-approaching a 10-month low after official data showed that U.S. retail sales rose less-than-expected in November.
EUR/USD pulled back from 1.3238, the daily high, to hit 1.3184 during European afternoon trade, dipping 0.03%.
The pair was likely to find short-term support at 1.3161, the session low and resistance at 1.3351, the high of November 25.
The U.S. Commerce Department said retail sales increased 0.2% after rising by an upwardly revised 0.6% in October, disappointing expectations for a 0.6% gain.
Core retail sales, which exclude automobile sales, rose 0.2% after advancing 0.6% in October.
Analysts had expected core retail sales to rise by 0.5% in November.
The euro found support earlier after data showing that the ZEW index of German economic sentiment rose for the first time in ten months in December, confounding expectations for a decline but the report said perceptions of current developments remained on a downward trend.
Meanwhile, an auction of Spanish government bonds met with solid investor demand, with the Treasury surpassing the targeted amount, selling EUR4.94 billion in 12-month and 18-month bonds.
But concerns over the risk of sovereign rating downgrades across the euro zone persisted after last week’s European Union summit failed to produce concrete plans to resolve the region’s debt crisis.
Elsewhere, the euro edged higher against the pound, with EUR/GBP inching up 0.04% to hit 0.8465.
Later Tuesday, the Federal Reserve was to announce its federal funds rate.
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