Forexpros – The euro traded lower against the U.S. dollar Tuesday, despite positive German economic sentiment numbers, on mixed U.S. economic data.
EUR/USD hit a high of 1.3172 and subsequently dropped to 1.3123 in U.S. afternoon trade.
The pair was likely to find support at 1.3032, the low of April 9 and resistance at 1.3172, the session high.
In the U.S., government data indicated industrial production was unexpectedly flat for the second consecutive month in March, missing analyst’s expectations for a 0.3% increase.
Additional government data showed that the number of building permits issued in the U.S. surprisingly increased in March, rising to the highest level since September 2008, while housing starts dropped significantly, painting a mixed picture of the U.S. housing sector.
The number of building permits issued last month climbed 4.5% to a seasonally adjusted 0.747 million, confounding expectations for a modest decline of 0.7% to 0.710 million.
However, U.S. housing starts fell to the lowest level since October, dropping 5.8% to a seasonally adjusted 0.654 million from a revised 0.694 million units in February. Economists had forecast housing starts to rise 1.0% in March to 0.705 million units.
Meanwhile in the euro zone, the debt crisis eased after an auction of Spanish short-term government bonds saw the country raise the full targeted amount of EUR3 billion, but at sharply higher yields.
Despite the positive signal, sentiment on the euro remained fragile amid uncertainty over whether Spain’s government can meet deficit reduction targets.
Elsewhere, data showed that German economic sentiment improved unexpectedly in April, rising for the fifth consecutive month.
The ZEW Centre for Economic Research said that its index of German economic sentiment increased to 23.4 in April from the previous month’s reading of 22.3. Analysts had expected the index to decline to 20.0.
The euro was approaching a 19-month low against the broadly stronger pound, with EUR/GBP dropping 0.36% to hit 0.8237 and remained higher against the yen, with EUR/JPY up 0.24% to trade at 105.93.
In other news, official data showed that the rate of consumer price inflation in the single currency bloc was 2.7% in March, up from a preliminary estimate of 2.6% and unchanged from February.
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