Forexpros – The euro held steady against the U.S. dollar in subdued trade on Tuesday, after upbeat U.S. consumer confidence data as worries over the worsening debt crisis in the euro zone continued to weigh.
EUR/USD hit 1.3083 during U.S. morning trade, the pair’s highest since December 23; the pair subsequently consolidated at 1.3063, adding 0.05%.
The pair was likely to find support at 1.3016, the low of December 22 and resistance at 1.3131, the high of December 20.
With most investors already away on year-end leave, trading volumes were expected to remain low, resulting in subdued trade.
Data showed earlier that U.S. consumer confidence rose more-than-expected in December, climbing to the highest level since April.
In a report, the Conference Board said its index of consumer confidence rose to 64.5 in December from a reading of 55.2 in November, whose figure was revised down from 56.0.
Analysts had expected the index to rise to 58.2 in December.
But the single currency remained vulnerable ahead of highly anticipated Italian bond auctions later in the week, as the yield on Italian ten-year bonds rose above the 7% threshold, a level widely considered to be unsustainable.
Italy’s Treasury was set to sell EUR9 billion of 179-day bills and EUR 2.5 billion of zero-coupon 2013 bonds on Wednesday.
Meanwhile, Spain’s new government predicted negative economic growth in the final quarter of 2011 and the first quarter of the new year, technically putting the country back into recession.
Investors were also wary after data showed that the use of the European Central Bank’s overnight deposit facility reached an all-time high on Monday, adding to speculation that the central bank’s three-year loan operation last week did little to strengthen the region’s banking sector.
Elsewhere, the euro was lower against the pound with EUR/GBP retreating 0.16%, to hit 0.8334.
Also Tuesday, data showed that the U.S. S&P/Case-Shiller home price index fell more-than-expected in October, declining for the 16th consecutive month.
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