LONDON (AFX) - The euro showed no signs of losing ground against the dollar in midday trade ahead of the much-followed U.S. February consumer data.
Dealers said the U.S. February consumer sentiment scheduled for release at 3.00 pm will be crucial as the data will allow greater insight into the health of the economy.
Brian Martin, global chief of foreign exchange at Barclays Capital said: "Today's figures will be very important and the market needs a poor consumer confidence if the euro was to gain any further." However, he added that despite the predominantly negative view on the U.S. economy, the euro failed to rally owing to the market being very poorly positioned.
"If the data shows a recovery in the consumer confidence, we are going to test lower euro/dollar resistance. A break below the 0.90 usd area could set for a move toward 0.875 usd," he said.
"The market is long euro and a lot of those positions were put on expectations of a hard landing in the U.S. but January's data did not support that view," he said.
U.S. consumer confidence fell to 114.4 in January from 128.6 and is expected to fall further in February with market consensus anticipating a fall to around 110.
Of economic news, an indicator of French business confidence for February fell to plus 13 in February from plus 17 in January. Analysts said the data came in weaker-than-expected but highlighted that the recent trend in the euro/dollar rate had been showing no reaction to European news. The market is not really ready to justify a move on Euroland growth data, they added.
Sterling continued to track euro/dollar.
"Factors such as the election and the referendum related to the E.U. are going to ensure that sterling will not trade independently against the euro but will continue to take its cue from dollar," Martin said.