Forex - EUR/USD drops to fresh 9-month lows after U.S. data

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Investing.com - The euro dropped to fresh nine-month lows against the U.S. dollar on Tuesday, as upbeat U.S. housing data and a report showing that U.S. inflation was in line with expectations last month lent broad support to the greenback.

EUR/USD hit 1.3317 during U.S. morning trade, the pair's lowest since November 2013; the pair subsequently consolidated at 1.3322, sliding 0.31%.

The pair was likely to find support at 1.3105 and resistance at 1.3399, Monday's high.

The dollar strengthened broadly after the U.S. Commerce Department said that the number of building permits issued last month jumped by 8.1% to 1.052 million units from June's total of 973,000. Analysts expected building permits to rise by 2.5% to 1.0 million units in July.

The report also showed that U.S. housing starts soared by 15.7% last month to hit 1.093 million units from June's total of 945,000, beating expectations for an increase of 8.6% to 969,000 units.

A separate report showed that U.S. consumer prices rose 0.1% last month, meeting estimates, after rising 0.3% in June.

Core consumer prices, which exclude food and energy costs, inched up by 0.1% last month, compared to expectations for a 0.2% gain. Core CPI rose 0.1% in June.

Meanwhile, sentiment on the single currency remained vulnerable after poor economic growth data last week added to pressure on the European Central Bank to implement fresh measures to shore up the faltering recovery in the region.

The euro was higher against the pound, with EUR/GBP rising 0.32% to 0.8014.

The pound came under pressure after official data earlier showed that the annual rate of inflation in the U.K. slowed to a two month low of 1.6% in July from 1.9% in June.

The slowdown in inflation prompted investors to push back expectations for a rate hike by the Bank of England, sending sterling lower across the board.

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This article appears in: Investing , Forex and Currencies

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