Investing.com - The euro dropped against a firming dollar on Friday after data revealed consumers in the U.S. are far more confident over their economy than markets were expecting.
In U.S. trading, EUR/USD was down 0.20% at 1.3156, up from a session low of 1.3155 and off a high of 1.3196.
The pair was likely to find support at 1.3153, Wednesday's low, and resistance at 1.3220, Thursday's high.
The Thomson Reuters/University of Michigan revised consumer sentiment index came in at 82.5 this month, up from a preliminary reading of 79.2 and exceeding expectations for a reading of 80.1.
July's final reading came in at 81.8, and the uptick in the final August reading bolstered the dollar by keeping expectations firm that the Federal Reserve will close stimulus programs around October and hike interest rates some time in 2015.
Separately, data revealed that the Chicago-area purchasing managers' index rose to 64.3 in August from 52.6 in July, beating expectations for an increase to 56.0.
On a less positive note, the Bureau of Economic Analysis reported that U.S. personal spending fell 0.1% last month, confounding expectations for a 0.2% rise, after an increase of 0.4% in June, though Friday's overall positive data coupled with upbeat reports from earlier this week reminded markets that the days of ultra-loose U.S. monetary policy that have weakened the greenback for years are coming to a close.
On Thursday, the Commerce Department reported that U.S. economy grew at a revised annualized rate of 4.2%, up from a preliminary estimate of 4.0% and better than market forecasts for a downward revision to 3.9%.
Meanwhile in Europe, preliminary data showed that euro zone consumer price index ticked down to an annualized rate of 0.3% this month from 0.4% in July, in line with expectations.
Core consumer price inflation, which excludes food, energy, alcohol, and tobacco, rose to 0.9% in August compared to a year earlier, from 0.8% in July.
Data also showed that the euro zone's unemployment rate remained unchanged at 11.5% last month.
Earlier Friday, official data showed that German retail sales declined 1.4% in July, disappointing expectations for a 0.1% rise, after a revised 1.0% gain in June.
Elsewhere, the euro was down against the pound, with EUR/GBP down 0.21% at 0.7930, and down against the yen, with EUR/JPY down 0.03% at 136.69.