Forexpros – The euro drifted lower against the U.S. dollar in quiet trade on Wednesday, as Tuesday’s stronger-than-forecast U.S. retail sales data dampened expectations for another round of quantitative easing by the Federal Reserve.
EUR/USD hit 1.2276 during European afternoon trade, the pair’s lowest since Monday; the pair subsequently consolidated at 1.2277, shedding 0.35%.
The pair was likely to find support at 1.2240, the low of August 10 and resistance at 1.2342, the session high.
The greenback remained supported following Tuesday’s data showing that U.S. retail sales snapped four successive months of declines in July, jumping 0.8%, surpassing expectations for a 0.3% increase.
The euro remained under pressure amid concerns over the economic outlook after data on Tuesday showed that the euro zone economy contracted 0.2% in the second quarter and German economic sentiment deteriorated this month.
Meanwhile, hopes that the European Central Bank will soon move to stem the debt crisis in the euro zone faded, as investors waited for more details of the bank’s proposed bond buying program to emerge.
Trade was subdued and volumes remained light, with many market participants away for summer holidays.
The euro was also lower against the pound and the yen, with EUR/GBP down 0.32% to 0.7834 and EUR/JPY dipping 0.06% to 96.94.
Later Wednesday, the U.S. was to release official data on consumer price inflation and industrial production, as well as a report on manufacturing activity in the New York area.
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