Investing.com - The euro was lower against the broadly firmer dollar on Tuesday, as the dollar’s gains against sterling led the greenback higher against the other major currencies.
EUR/USD hit 1.2841 during European afternoon trade, the session low; the pair subsequently consolidated at 1.2861, shedding 0.17%.
The pair was likely to find support at 1.2818, Monday’s low and resistance at 1.2928, the high of May 16.
The pound fell to seven week lows against the dollar after official data showed that U.K. consumer inflation slowed to an annual rate of 2.4% in April from 2.8% the previous month.
It was the first decline in inflation since September and was below expectations for a reading of 2.6%.
The dollar prompted broad based dollar buying ahead of Wednesday’s Federal Reserve minutes and testimony at the U.S. Joint Economic Committee by Fed Chairman Ben Bernanke.
Markets were awaiting any indication that the U.S. central bank will begin to scale back its asset purchase program this year after recent U.S. economic data bolstered optimism over the economic recovery.
The euro rose to session highs against the pound, with EUR/GBP advancing 0.56% to 08490 and gained ground against the yen, with EUR/JPY climbing 0.36% to 132.25.
Elsewhere Tuesday, Germany’s Bundesbank said its expected economic growth to be stronger in the second quarter of this year, but said that the weak economic situation in the euro zone remains a “significant” risk to the economy.
Data last week showed that the Germany economy expanded by 0.1% in the three months to March, while the euro zone economy contracted by 0.2%.
