EUR/USD was trading close to almost three-week lows on Wednesday, as the greenback continued its expansion after Tuesdays strong series of data from the United States.
EUR/USD fell to a session low at 1.3056 during the later phase of Asian trade, the lowest point since June 5th, after which consolidation followed at 1.3066. Support was likely to be found at psychological 1.3000 level, while resistance was to be met at June 24th high, 1.3143.
Yesterday it was reported that US Consumer Confidence increased to the highest level since January 2008 in June, reaching the reading of 81.4, far above expectations of a value at 75.0. The Conference Board research group stated, that US consumers have become more optimistic about current business situation and labour market development since the beginning of the year.
New Home Sales in the United States also recorded better figures in May, reaching 0.476 million units, exceeding forecasts of 0.460 million homes sold.
Durable Goods Orders were reported to have risen by 3.6% in May, confirming the rate, recorded after an upward revision during the previous month, and above expectations of a 3.0% rise.
Last weeks Wednesday FED Chairman Ben Bernanke said that the central bank will begin to wind down its bond purchases by this years end, in case economy continued to improve.
Meanwhile, fears over a credit shrinkage in China eased after the country’s central bank gave indications on Tuesday, that it embarked on such act in order to bolster financial institutions with liquidity.
At the same time, optimism among German consumers reached almost six-year high, as was shown on Wednesday in “GfK-Wirtschaftsdienst Konsum – und Sparklima” survey. Stability of the labour market in the country as well as rising remuneration gave the prospects of a possible income increase of households in Germany and therefore, higher expectations, regarding economic recovery. Survey results usually refer to one month after the current. Gfk research group said that Consumer Confidence rose for the sixth time in a row, reaching 6.8 in July from 6.5 in June. This was the highest point since September 2007 and surpassed the projected reading of 6.5.
Euro was on lower levels against the British pound, as EUR/GBP pair erased 0.14% to reach 0.8470. Additionally, EUR/JPY pair fell by 0.46% to 127.34.
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