NEW YORK (Forex News Now) – The euro hit a 2-month high against the dollar on Wednesday, adding to the previous day’s sharp gains, in the wake of disappointing data on U.S. retail sales and business inventories.
In U.S. afternoon currency trading, EUR/USD reached 1.2778, its highest since May 11. The currency pair later retreated slightly to trade at 1.2766, up 0.32 percent on the day.
Census Bureau data showed earlier in the day that U.S. retail sales fell more than expected in June for a second consecutive month, heightening fears about slower growth in the world’s biggest economy.
According to forex analysis, EUR/USD was likely to touch immediate support around Tuesday’s low, 1.2523, and encounter resistance around the high of May 5, 1.2996.
Also Wednesday, a report from the Commerce Department showed that Inventories held by businesses rose for a fifth straight month in May, but less than expected.
Meanwhile, the euro fell versus sterling: EUR/GBP traded at 0.8354, down 0.35 percent on the day.