Investing.com - Better-than-expected housing and consumer confidence indicators sparked demand for the dollar on Tuesday, weakening the euro on sentiments the days of ultra-loose monetary policy in the U.S. are coming to an end.
In U.S. trading, EUR/USD was down 0.12% at 1.3586, up from a session low of 1.3583 and off a high of 1.3628.
The pair was likely to find support at 1.3574, Monday''s low, and resistance at 1.3643, Thursday''s high.
The housing sector, which threw the U.S. into the worst downturn since the Great Depression and dragged on recovery for years, continues to show signs of recovery even if in fits and starts.
New home sales rose to a six-year high, surging 18.6% in May to an annual rate of 504,000, according to the U.S. Census Bureau. May''s figure was the highest level since May 2008 and the largest monthly increase since January 1992.
Analysts were expecting new home sales to rise 1.6% to 440,000 units.
The dollar also saw demand after the Conference Board reported that its consumer confidence index jumped to 85.2 in June from 82.0 last month. It was the highest reading since January 2008.
Analysts were expecting a reading of 83.5.
The numbers kept market expectations firm for the Federal Reserve to continue winding down its monthly bond-buying program this year and begin hiking interest rates in 2015.
Fed stimulus programs such as monthly bond purchases weaken the dollar by suppressing long-term interest rates, which sends investors to assets like stocks in hopes lower borrowing costs will spur investment and hiring.
Meanwhile in Europe, investors took in stride data revealing that the German Ifo business climate index fell to a six-month low of 109.7 this month from 110.4 in May, missing estimates for a 110.3 reading.
The euro shrugged off the data on sentiments geopolitical concerns have businesses worried more than structural issues in the German economy.
"Assessments of the current business situation remained good, but companies were less optimistic about future business developments. The German economy fears the potential impact of the crises in Ukraine and Iraq," Ifo President Hans-Werner Sinn said.
Sinn added that although the export outlook for manufacturing had "clouded over considerably, the majority of manufacturers remain optimistic."
The manufacturing component of the index fell to 15.7 from 19.0 in May, but the construction, wholesaling and retail components all improved.
Elsewhere, the euro was up against the pound, with EUR/GBP up 0.21% at 0.8007, and up against the yen, with EUR/JPY up 0.08% at 138.78.
On Wednesday, market research group Gfk is to publish a report on German consumer climate.
The U.S. is to publish data on durable goods orders, as well as revised data on first quarter growth.
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