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Forex - EUR/USD remains lower amid debt worries

Published 11/15/2011, 10:35 AM
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Investing.com - The euro remained lower against the U.S. dollar on Tuesday, as ongoing concerns over the worsening debt crisis in the euro zone continued to weigh on the single currency.

EUR/USD hit 1.3513 during U.S. morning trade, the pair's lowest since November 10; the pair subsequently consolidated at 1.3547, dropping 0.63%.

The pair was likely to find support at 1.3417, the low of September 23 and resistance at 1.3683, the high of October 11.

The euro came under pressure after Italy's 10-year bond yields rose to near unsustainable levels, climbing above 7% earlier, while the yield on Spanish 10-year bonds rose above 6% for the first time since the European Central Bank started to buy the country's bonds in August.

Meanwhile, Italy's prime minister-designate Mario Monti was racing to assemble a new government so he could speed up reforms and reverse a collapse in market confidence.

Also Tuesday, data showed that the ZEW index of German economic sentiment fell to a three-year low in November, as political uncertainty in Greece and Italy weighed on the outlook for the region.

A separate report showed that gross domestic product in the euro zone increased by 0.2% during the third quarter, in line with expectations, following growth of 0.2% in the previous quarter.

Earlier in the day, the U.S. Commerce Department said retail sales rose more-than-expected in October, increasing 0.5%, while core retail sales also beat expectations, climbing 0.6%.

A separate report showed that producer price inflation in the U.S. eased more-than-expected in October, declining 0.3% compared to expectations for a 0.2% drop.

Elsewhere, the euro was also down against the pound with EUR/GBP declining 0.09%, to trade at 0.8563.

Also Tuesday, the Federal Reserve Bank of New York said that its general business conditions index improved by 9.1 points to 0.6 in November from minus 8.5 in October.

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