The euro fell to fresh eight month lows against the dollar on Tuesday after data showed that U.S. consumer confidence rose to a seven year high this month, underlining the view that the economic recovery is gaining traction.
EUR/USD was down 0.21% to 1.3410, the lowest level since November 21.The pair was likely to find support at 1.3360 and resistance at 1.3443, the session high.The dollar gained ground after the Conference Board reported that its index of consumer confidence rose to 90.9 in July from an upwardly revised 86.4 in June. It was the highest reading since October 2007 and was ahead of expectations for a decline to 85.3.
Demand for the dollar continued to be underpinned ahead of preliminary data on U.S. second-quarter growth and the Federal Reserve’s latest rate statement, both due on Wednesday. Investors were also awaiting the U.S. nonfarm payrolls report for July on Friday.
Earlier this month Fed Chair Janet Yellen indicated that rates could rise sooner if the recovery in the labor market continued.The euro remained under heavy selling pressure amid concerns over the divergence in monetary policy between the European Central Bank and its major peers.
The euro zone was to release what would be closely watched data on consumer prices on Thursday, amid concerns over persistently low levels of inflation in the currency bloc.The euro was steady against the yen, with EUR/JPY at 136.93, holding above Thursday’s five month lows of 136.35.