Investing.com - The euro rose to the day’s highs against the dollar on Tuesday as a mixed batch of U.S. economic reports highlighted concerns over the economy ahead of Friday’s keenly anticipated employment report.
EUR/USD edged up 0.11% to 1.1149, moving back from the 10-week trough of 1.1097 set on Monday.
The dollar moved lower after reports showing that while consumer spending rose at the fastest rate in almost seven years in April, consumer confidence deteriorated for a second month in May.
The Commerce Department said consumer spending jumped 1.0% last month, the largest increase since August 2009 and above expectations for a 0.7% increase.
Personal income rose by 0.4%, in line with forecasts.
The core personal consumption expenditures (PCE) price index rose by an annualized 1.6%, matching the previous months gain.
The core PCE is the Federal Reserve’s preferred inflation gauge.
Another report showed that U.S. consumer confidence deteriorated in for a second month in May, as consumers remained cautious about the outlook for business and labor market conditions.
The Conference Board said its index of consumer confidence fell to 92.6 from a revised 94.7 in April. Analysts had forecast a reading of 96.0.
In the euro zone, data on Tuesday showed that consumer prices remained in negative territory this month, though the rate of deflation eased.
Eurostat reported that the flash estimate showed that consumer prices in the single currency bloc fell 0.1% on a year-over-year basis in May, in line with economists’ expectations after falling 0.2% in April.
A separate report showed that the euro area’s unemployment rate came in at 10.2% in April, unchanged from the previous month.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 95.78, holding below Monday’s two-month highs of 95.96.
Demand for the dollar continued to be underpinned after U.S. central bank chief Janet Yellen said late last week it could be appropriate for the Fed to raise rates in the coming months.
The Fed hiked interest rates in December for the first time in almost a decade.
Higher rates are positive for the dollar because they make the U.S. currency more attractive to yield-seeking investors.
Investors were turning their attention to Friday’s U.S. nonfarm payrolls report for May for fresh indications on the strength of the labor market.
The dollar remained slightly lower against the yen, with USD/JPY sliding 0.22% to 110.87, backing off Monday’s three-week highs of 111.44.
The pound was weaker, with GBP/USD down 0.58% at 1.4554 as opinion polls showed increased support for a campaign to leave the European Union in the upcoming June 23 referendum.