Investing.com – The euro slumped to an 11-month low against the U.S. dollar on Wednesday, as speculation over euro zone sovereign ratings downgrades supported demand for the safety of the greenback.
EUR/USD hit 1.2991 during U.S. morning trade, the pair’s lowest since January 12; the pair subsequently consolidated at 1.2982, shedding 0.42%.
The pair was likely to find support at 1.2872, the low of January 10 and resistance at 1.3064, the session high.
Sentiment on the euro has weakened in recent days on the view that last week's European Union summit did not result in a decisive plan to resolve the debt crisis in the region.
Concerns over mass ratings cuts across the euro zone persisted despite adequate investor demand at auctions of Italian and German government debt earlier in the day.
Italy’s Treasury sold the full targeted amount of EUR3 billion of five-year government bonds, but saw bond yields rise to a euro-era highs.
Germany auctioned EUR4.18 billion of two-year bonds at record low yields, reassuring investors after an auction of 10-year bonds last month met with extremely weak investor demand.
Meanwhile, demand for the greenback remained supported after the Federal Reserve warned that market turbulence stemming from the crisis in the euro zone posed a threat to the U.S. economy but stopped short of indicating fresh stimulus measures to shore up growth.
The euro was also lower against the pound, with EUR/GBP shedding 0.21% to hit 0.8403.
Also Wednesday, official data showed that industrial production in the euro zone declined unexpectedly in October, falling for the second consecutive month.
EUR/USD hit 1.2991 during U.S. morning trade, the pair’s lowest since January 12; the pair subsequently consolidated at 1.2982, shedding 0.42%.
The pair was likely to find support at 1.2872, the low of January 10 and resistance at 1.3064, the session high.
Sentiment on the euro has weakened in recent days on the view that last week's European Union summit did not result in a decisive plan to resolve the debt crisis in the region.
Concerns over mass ratings cuts across the euro zone persisted despite adequate investor demand at auctions of Italian and German government debt earlier in the day.
Italy’s Treasury sold the full targeted amount of EUR3 billion of five-year government bonds, but saw bond yields rise to a euro-era highs.
Germany auctioned EUR4.18 billion of two-year bonds at record low yields, reassuring investors after an auction of 10-year bonds last month met with extremely weak investor demand.
Meanwhile, demand for the greenback remained supported after the Federal Reserve warned that market turbulence stemming from the crisis in the euro zone posed a threat to the U.S. economy but stopped short of indicating fresh stimulus measures to shore up growth.
The euro was also lower against the pound, with EUR/GBP shedding 0.21% to hit 0.8403.
Also Wednesday, official data showed that industrial production in the euro zone declined unexpectedly in October, falling for the second consecutive month.