Investing.com - The euro held steady against the dollar on Friday as investors blamed disappointing U.S. housing data on rough winter weather and stuck with the view the economy continues to improve and is in less need of Federal Reserve stimulus tools.
Stimulus programs such as the Fed''s $65 billion in monthly bond purchases weaken the dollar by driving down interest rates, and talk of their dismantling can support the greenback.
In U.S. trading, EUR/USD was trading at 1.3723, up 0.03%, up from a session low of 1.3702 and off a high of 1.3757.
The pair was likely to find support at 1.3686, Thursday''s low, and resistance at 1.3774, Wednesday''s high.
The National Association of Realtors reported earlier that U.S. existing home sales declined 5.1% to 4.62 million units last month, outpacing expectations for a 4.3% drop to 4.68 million units.
In December, existing home sales were revised to a 0.8% rise to 487 million units from an initially estimated 1% increase.
While the Fed has said it will pay close attention to data when deciding the pace at which it winds down is asset purchases, many investors bet the disappointing numbers were the product of a string of blizzards sweeping across the country that disrupted commerce, which gave the dollar support.
The euro, meanwhile, saw some headwinds after Markit Economics reported Thursday that the euro zone composite output purchasing managers’ index ticked down to a two-month low of 52.7 this month, down from January’s 31-month high of 52.9.
Analysts were expecting a 53.1 reading, and the report softened the euro due to the continent''s still high unemployment rates and soft inflationary pressures, which many think will prompt the European Central Bank to loosen policy if recovery flounders.
The euro was up against the pound, with EUR/GBP gaining 0.19% to 0.8254, and up against the yen, with EUR/JPY trading up 0.53% at 141.06.
Official data earlier revealed that U.K. retail sales dropped 1.5% in January, more than the expected 1% decline. Retail sales in December were revised down to a 2.5% increase from a previously estimated 2.6% gain.
On a yearly basis, U.K. retail sales rose 4.3% last month, compared to expectations for a 5% increase, after a 5.3% advance in December.
The yen, meanwhile, came under pressure after the minutes of its January policy meeting released earlier revealed that the Bank of Japan decided to avoid any misunderstanding about its monetary easing program, the bank needed "to provide a clear explanation that it did not strictly set this to end in two years."
In April last year, the BoJ had announced a policy overhaul that aimed to double the money supply and achieve 2% inflation within about two years.