Investing.com - The euro fell to fresh two-month lows against the U.S. dollar on Tuesday, after data showed that German economic sentiment dropped unexpectedly this month, adding to concerns over a slowdown in the euro zone’s largest economy.
EUR/USD hit 1.2662 during European morning trade, the pair’s lowest since September 7; the pair subsequently consolidated at 1.2672, shedding 0.29%.
The pair was likely to find support at 1.2625, the low of September 7 and resistance at 1.2709, the session high.
The ZEW Centre for Economic Research said that its index of German economic sentiment fell to minus 15.7 in November from October’s reading of minus 11.5. Analysts had expected the index come in at minus 9.8 this month.
The report said that "recessionary developments" in the euro zone are expected to curtail German economic growth in the next six months.
Sentiment on the single currency was also hit by concerns over a delayed bailout payment for Greece amid disagreements between officials from the International Monetary Fund and Europe on how best to reduce Greece’s debt to manageable levels.
A decision on unlocking a EUR31.5 billion bailout installment has been postponed until 20 November.
Safe haven demand continued to be underpinned by concerns over the U.S. fiscal cliff, automatic tax hikes and spending cuts due to come into effect on January 1, which could threaten U.S. and global growth.
The euro extended losses against the pound and the yen following the data, with EUR/GBP down 0.34% to 0.7978 and EUR/JPY falling 0.54% to 100.50.
Earlier Tuesday, official data showed that U.K. consumer prices rose sharply in October, as a result of increases in the cost of food, transport and university fees.
The Office for National Statistics said the annual rate of consumer price inflation accelerated to 2.7% in October from 2.2% in September and a five month high.
EUR/USD hit 1.2662 during European morning trade, the pair’s lowest since September 7; the pair subsequently consolidated at 1.2672, shedding 0.29%.
The pair was likely to find support at 1.2625, the low of September 7 and resistance at 1.2709, the session high.
The ZEW Centre for Economic Research said that its index of German economic sentiment fell to minus 15.7 in November from October’s reading of minus 11.5. Analysts had expected the index come in at minus 9.8 this month.
The report said that "recessionary developments" in the euro zone are expected to curtail German economic growth in the next six months.
Sentiment on the single currency was also hit by concerns over a delayed bailout payment for Greece amid disagreements between officials from the International Monetary Fund and Europe on how best to reduce Greece’s debt to manageable levels.
A decision on unlocking a EUR31.5 billion bailout installment has been postponed until 20 November.
Safe haven demand continued to be underpinned by concerns over the U.S. fiscal cliff, automatic tax hikes and spending cuts due to come into effect on January 1, which could threaten U.S. and global growth.
The euro extended losses against the pound and the yen following the data, with EUR/GBP down 0.34% to 0.7978 and EUR/JPY falling 0.54% to 100.50.
Earlier Tuesday, official data showed that U.K. consumer prices rose sharply in October, as a result of increases in the cost of food, transport and university fees.
The Office for National Statistics said the annual rate of consumer price inflation accelerated to 2.7% in October from 2.2% in September and a five month high.