Investing.com - The euro firmed slightly against the dollar on Thursday on the coattails of stronger-than-expected U.S growth revisions, which sparked demand for risk-on assets, though fears that a U.S. budgetary impasse could cool growth rates next year offset the greenback's decline against the single currency.
In U.S. trading on Thursday, EUR/USD was trading up 0.11% at 1.3242, up from a session low of 1.3190, and off from a high of 1.3296.
The pair was likely to find support at 1.3144, Monday's low, and resistance at 1.3308, Wednesday's high.
Solid U.S. data sparked some demand for risk, enticing investors out of the U.S. dollar.
Official data released earlier showed that manufacturing activity in the Philadelphia-region expanded at its fastest pace in eight months in December.
The Philly Fed manufacturing index rose to 8.1 in December from -10.7 in November, compared to expectations for a reading of -3.0.
Elsewhere, the National Association of Realtors reported earlier that existing home sales rose by 5.9% to a seasonally adjusted 5.04 million units in November, beating market calls for U.S. existing home sales to rise 2.3% to 4.87 million units.
Revised government data showed that the U.S. economy grew by an annualized 3.1% in the third quarter of this year, up from a preliminary estimates of 2.7% and also above market calls for 2.8% growth.
On the labor front, the U.S. Department of Labor reported that weekly initial jobless claims last week rose by 17,000 to 361,000, compared to expectations for an increase of 13,000 to 357,000.
The European Commission, meanwhile, reported that its December index of household confidence in the 17-nation currency group improved to -26.6 from -26.9 in November.
Analysts were forecasting no change for the indicator.
Fiscal uncertainty in the U.S. dampened an otherwise risk-on trading session.
Failure to strike a budgetary agreement in the U.S. will allow sweeping tax cuts to expire at the same time deep cuts to government spending are scheduled to kick in, a combination known as a fiscal cliff that could contract the economy by 0.5% next year if Congress fails to avoid it, according to Congressional Budget Office estimates.
Both sides of the U.S. political aisle recently came close to agreeing on the role income tax hikes should play when narrowing deficits and paying down debts.
Democrats, who originally called for tax increases on incomes of over USD250,000 a year, hiked that threshold to USD400,000.
Republicans, who originally opposed any and all income tax hikes, later said they would accept raising rates on those earning a minimum USD1 million.
House Speaker John Boehner earlier said Republicans in the U.S. House of Representatives will push through their proposal despite President Obama's calls to veto it, which kept investors camped out in safe and liquid U.S. dollar positions to ride out uncertainty.
The euro, meanwhile, was down against the pound and up against the yen, with EUR/GBP trading down 0.14% at 0.8130, and EUR/JPY trading up 0.12% at 111.78.
On Friday, the eurozone will release a report on German consumer climate, a leading indicator of consumer spending.
The U.S. will unveil revised data on consumer sentiment from the University of Michigan, as well as government data on personal income and spending.
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