The euro was slightly changed against the US dollar on Wednesday, trading in proximity to its lowest point in one week despite improving German consumer confidence.
EUR/USD slipped to a session low at 1.3461 at 3:40 GMT, after which consolidation followed at 1.3473, dipping a mere 0.01% for the day. Support was likely to be received in the area 1.3430-1.3450, while resistance was to be encountered at September 24th high, 1.3518.
Earlier today it became clear that according to the survey GfK-Wirtschaftsdienst Konsum – und Sparklima, the index of German consumer confidence rose to 7.1 in October, marking its highest value since September 2007, from a reading of 6.9 in the preceding month, while expectations pointed an increase to 7.0. The survey was conducted before the German elections, where the present Chancellor Merkel and her conservative party have won in a convincing manner. However, this may dampen to a certain extent the future expectations of consumers regarding their income, as Angela Merkels anti-crisis policy may increase the financial pressure on German tax payers.
In addition, yesterday the IFO institute reported that German business climate index, based on a survey of 7 000 executives, increased for the fifth consecutive month in September, reaching a reading of 107.7, after the index stood at 107.6 in August. Experts had anticipated that the index will advance to 108.0.
In the mean time, caution still dominated investors decisions, as concerns over the US recovery outlook appeared, after the surprising decision by the Federal Reserve Bank to leave its stimulus program without change last week. Another indicator to add to these concerns was the US consumer confidence, as it decreased at a faster pace than projected in September. The index, gauging consumer sentiment in the United States, slowed down to 79.7 in September from the revised up reading of 81.8 in August.
Later in the trading day the US will release data on durable goods orders. Median estimates pointed a 0.1% drop in August compared to July, after orders plunged 7.4% in July. Since this indicator gives a substantial part of the general factory orders, better than projected results may certainly provide support to the greenback. Another crucial report due out later on Wednesday is focused on the new home sales in the United States. Experts anticipated an increase to an annual number of 0.420 million in the month of August compared to the 0.394 million homes in July. This indicator provides vital information regarding current conditions in the US housing market and in case expectations are exceeded, the US dollar will receive a boost.
Elsewhere, the euro was slightly higher against the sterling, as EUR/GBP cross added 0.08% to trade at 0.8428 at 7:03 GMT. EUR/JPY pair, on the other hand, was losing 0.14% on a daily basis to trade at 132.88 at 7:04 GMT.
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