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Forex - EUR/USD lower on talk Greece has euro exit route

Published 05/22/2012, 07:52 PM
Updated 05/22/2012, 07:54 PM
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Investing.com - The euro was down against the U.S. dollar on Wednesday after former Greek Prime Minister Lucas Papademos admitted that the country has crafted a roadmap to exit the eurozone although the possibility of such a risk isn't likely.

In Asian trading on Wednesday, EUR/USD was trading down 0.19% at 1.2660, up from a session low of 1.2657, and off from a high of 1.2689.

The pair was likely to test support at 1.2624, the low of Jan. 13, and resistance at 1.2824, the high of May 21.

In Greece, the country's financial stability fund approved a EUR18 billion capital injection for the country's four top banks, however, former Prime Minister Lucas Papademos reportedly told Dow Jones newswires the possibility of a Greek exit from the eurozone was a real possibility.

The news sent the euro plunging although it regained some composure in early Asian trading.

European leaders are due to meet later Wednesday although the meeting was not expected to produce too many market-moving comments.

Concerns are brewing that France's new President Francois Hollande will begin to voice support for more growth and spending, which would be at odds from Germany's pro-austerity stance.

In the U.S., the National Association of Realtors reported that existing home sales rose by 3.4% on year to a seasonally adjusted 4.62 million units in April, outpacing expectations for a 2.9% increase to 4.60 million units.

The March figure, however, was revised down to 4.47 million units from a previously reported 4.48 million.

The euro, meanwhile, was down against the pound and up against the yen, with EUR/GBP down 0.16% at 0.8036 and EUR/JPY trading down 0.08% at 101.33.

Later Wednesday, the eurozone will publish official data on the current account balance, which is closely linked to currency demand.

The U.S. will release government data on new home sales, a leading indicator of economic health, as well as data on crude oil stockpiles.






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