Investing.com - The euro fell to session lows against the dollar on Thursday, following data showing that the U.S. economy expanded 3.2% in the fourth quarter, one day after the Federal Reserve reduced bond purchases to $65 billion a month.
EUR/USD hit 1.3568, the lowest since January 23 and was last down 0.61% to 1.3579.
The pair was likely to find support at 1.3529, the low of January 23 and resistance at 1.3664, the session high.
The dollar extended board gains after the Commerce Department said gross domestic product expanded 3.2% in the three months to December, in line with forecasts, compared to a 4.1% rise in the third quarter.
Consumer spending rose by 3.3%, the strongest since the fourth quarter of 2010 while exports grew by 11.4%.
Separate reports showed that weekly jobless claims rose more than forecast last week, while pending home sales fell unexpectedly in December.
The Labor Department said the number of people who filed for unemployment assistance in the U.S. last week rose by 19,000 to 348,000 from the previous week’s revised total of 329,000.
The National Association of Realtors said its pending home sales index dropped by a seasonally adjusted 8.7% last month, disappointing expectations for a 0.3% gain.
Unease over emerging markets continued to underpin safe haven demand, amid concerns over the impact of cuts in Fed stimulus and worries over a possible slowdown in China.
Emerging economies such as Turkey and South Africa rely heavily on foreign investor flows to fund their current account shortfalls, making them particularly vulnerable to a reduction in global liquidity as the Fed scales back stimulus.
The euro came under pressure after data released on Thursday showed that the annual rate of inflation in Germany slowed to 1.3% in January from 1.4% in December, compared to expectations for an uptick to 1.5%. The data fuelled concerns over the risk of deflation in the euro area.
German inflation fell 0.6% in January from a month earlier. Market expectations were for a decline of 0.4%.
Earlier Thursday, data showed that the number of unemployed people in Germany fell by 28,000 in December, outstripping expectations for a decline of 5,000. The German unemployment rate was unchanged at 6.8%.
Another report showed that Spain’s recovery picked up in the fourth quarter, with gross domestic product expanding by 0.3%, up from 0.1% in the three months to September.
The euro fell to two-month lows against the yen, with EUR/JPY down 0.30% to 139.30 and was also lower against the pound, with EUR/GBP sliding 0.30% to 0.8224.
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