The euro retreated against the US dollar on Tuesday, because of concerns over a possible military action by the United States against Syrian government, which supported demand for the greenback.
EUR/USD fell to a session low at 1.3355 at 6:15 GMT, after which consolidation followed at 1.3363. Support for the pair was expected at August 21st low, 1.3334, while resistance was to be encountered at August 23rd high, 1.3408.
IFO institute’s business climate index for Germany probably rose for a fourth month in a row in August, based on a survey of 7 000 executives. Official data is expected later in the day, while median estimates pointed an advance to 107.0 in August from a reading of 106.2 in July. Better than projected results would certainly support the common currency.
“EUR resilience has been impressive over recent weeks,” Mitul Kotecha, the global head of foreign-exchange strategy in Hong Kong at Credit Agricole SA (ACA), wrote in a note to clients, cited by Bloomberg. “Although the growth trajectory looks firmer in the U.S., the propensity to surprise in a positive direction has come from euro-zone data releases.”
Mewnhile, the greenback received a boost, after US Secretary of State John Kerry said that President Barack Obama will hold Syrian government accountable for the “moral obscenity” of using chemical weapons.
Additionally, yesterday the Department of Commerce said that total durable goods orders in the United States dropped by 7.3% to 226.3 billion USD in July, while the median estimate pointed a lesser decrease, by 4.0%. Durable goods orders, excluding volatile components such as goods in the sector of transportation, also decreased, by 0.6% in July compared to June, confounding expectations of a 0.5% increase. Durable goods orders, excluding sector of defense, fell by 6.7% in July, as experts had anticipated a much lesser drop, by 2.6%. These data points furthered uncertainty over the timing of a possible scale back of Feds monetary stimulus.
Later on Tuesday S&P and Case-Shiller will show data on house prices in 20 large cities in the United States, followed by a separate report on consumer confidence.
Elsewhere, the euro was higher against the sterling, as EUR/GBP cross added 0.19% to trade at 0.8601 at 7:08 GMT. On the other hand, EUR/JPY pair was losing ground, down by 0.32% for the day, trading at 131.30 at 7:10 GMT.
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