EUR/USD slips from 2-month high on risk aversion

NEW YORK (Forex News Now) – The euro slipped from a 2-month high against the dollar on Tuesday, as U.S. stocks declined and amid risking risk aversion following mixed U.S. economic data.

In U.S. afternoon currency trading, EUR/USD hit 1.2894, down 0.38 percent on the day, after falling from the daily high of 1.3028, the pair’s highest since May 10.

Official data showed earlier that U.S. housing starts hit their lowest level in eight months in June. However, an unexpected slight increase in building permits during the month offered hope of a future rise in homebuilding.

According to forex analysis, EUR/USD was likely to touch support around 1.2683, the low of July 14, 2009, and encounter immediate resistance at 1.3028.

The euro’s decline came despite an official report on Tuesday which showed that producer prices in Germany, the euro zone’s largest economy, rose significantly more than expected in June.

Meanwhile, the euro sank versus sterling: EUR/GBP traded at 0.8444, down 0.63 percent.