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Forex - EUR/USD dips on sluggish U.S. housing data

Published 03/21/2012, 07:36 PM
Updated 03/21/2012, 07:40 PM
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Investing.com - The euro weakened against the dollar Thursday on news that housing in the U.S. remains sluggish, which sent investors selling riskier assets and running to the dollar in search of safety.

In Asian trading on Thursday, EUR/USD hit 1.3213, down 0.02%, up from a session low of 1.3210 and off from a high of 1.3218.

The pair was likely to test support at 1.3179, Wednesday's low, and resistance at 1.3285, Wednesday's high.

In the U.S., the National Association of Realtors reported that total existing-home sales slipped 0.9% to a seasonally adjusted annual rate of 4.59 million in February, from an upwardly revised 4.63 million in January but a little weaker than expected.

Lackluster housing figures stoked fears that the U.S. housing sector, which threw the country into recession and continues to dampen recovery, is improving but remains far from charging ahead, which is what markets are really waiting to see.

"The market is trending up unevenly," Lawrence Yun, NAR chief economist said in a statement.

Investors sold stocks on the news and stocked up on dollars.

Meanwhile, Federal Reserve Chairman Ben Bernanke said that Europe must firm up its banking sector and added that its financial situation faces difficulties despite a market lull in the debt crisis.

Meanwhile in Europe, Greek Deputy Finance Minister Filippos Sachinidis was sworn in as the country’s new finance minister, while Athens repaid EUR14.5 billion in maturing debt fresh on the heels of receiving a first tranche of aid.  

Germany and Portugal sold bonds at auction at terms that helped allay Europe's financial fears.

The euro, meanwhile, was up against the pound and down against the yen, with EUR/GBP trading up 0.02% at 0.8328 and EUR/JPY down 0.06% at 110.18.

Later Thursday, the eurozone will unveil preliminary data on manufacturing and service sector activity, while Germany and France are to publish separate breakdowns.

The eurozone will also publish data on industrial production, and later in the day, ECB President Mario Draghi is to speak.

The U.S., meanwhile, will publish official data on initial jobless claims, a leading indicator of economic health.

Fed Chairman Ben Bernanke is to speak at an event in Washington; his comments will be closely watched for possible indications on the future direction of monetary policy.






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