Forex - EUR/USD steady near 2-year trough in subdued trade

Posted on at - The euro held steady against the U.S. dollar in subdued trade on Tuesday, hovering close to two-year lows as expectations for a U.S. rate hike in 2015 continued to lend broad support to the greenback.

Trading volumes were expected to remain light ahead of the New Year's holiday.

EUR/USD hit 1.1214 during European afternoon trade, the pair's lowest since July 2012; the pair subsequently consolidated at 1.2160.

The pair was likely to find support at 1.2040 and resistance at 1.2228, the high of December 26.

The dollar remained broadly supported after final data last week showed that U.S. gross domestic product rose 5.0% in the third quarter, exceeding expectations for a growth rate of 4.3% and up from 3.9% in the three months to June.

The strong data fuelled further optimism over the strength of the U.S. economic recovery and added to expectations for the Federal Reserve to raise interest rates next year.

Separately, investors remained cautious after Greek Prime Minister Antonis Samaras said on Monday that he will recommend parliamentary elections are held on January 25, almost 18 months before his coalition's term was due to end.

The announcement came as Samaras failed in his third attempt to persuade lawmakers to back his candidate for head of state, forcing the legislature’s dissolution.

The euro was also steady against the pound, with EUR/GBP at 0.7828.

Later in the day, the U.S. was to release data on consumer confidence.

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