EUR/USD lower on German consumer confidence, Syria tension

The euro slipped to lower levels against the US dollar on Wednesday, as tension in the Middle East escalated and laid support to safe haven assets.

EUR/USD fell to its lowest point today at 1.3370 at 7:11 GMT. Support was likely to be found at August 27th low, 1.3321, while resistance was to be encountered at August 21st high, 1.3426.

Yesterday the US Defense Secretary Chuck Hagel said American forces were “ready” to commence their offensive, if President Barack Obama chooses to order an attack. The United States, France and the United Kingdom signaled a possible armed response against Syria, after the conclusion that the Syrian regime had used chemical weapons against the population. This led to risk aversion among investors.

Meanwhile, the greenback received additional support after on Tuesday it was reported that US index of consumer confidence has risen unexpectedly in August, reaching a value of 81.5 up from 81.0 in July, confounding expectations of a drop to 79.0.

At the same time, earlier today the Gfk survey showed that consumer confidence in Germany unexpectedly decreased for the first time in eight months in September, but however, record low interest rates and rising inflation urged consumers to consider more significant purchases. The index of consumer confidence in Germany fell to a reading of 6.9 in September from 7.0 in August, while it was anticipated that the index will climb to a value of 7.1. Gfk experts said that this recorded drop in confidence would not likely mark the beginning of a longer-period downward trend.

Elsewhere, the euro was slightly higher against the sterling, as EUR/GBP cross added 0.06% to trade at 0.8622 at 7:26 GMT. EUR/JPY pair was advancing 0.25% on a daily basis to trade at 130.29 at 7:26 GMT.