Forex - EUR/JPY close to 3-month low, focus on E.Z. woes

Published 05/08/2012, 08:23 AM
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Investing.com - The euro was lower against the yen on Tuesday, trading close to a three-month low as renewed euro zone debt concerns following Sundays Greek and French votes weighed broadly on demand for the single currency.

EUR/JPY hit 103.74 during European afternoon trade, the daily low; the pair subsequently consolidated at 103.88, declining 0.37%.

The pair was likely to find support at 103.22, Monday’s low and resistance at 104.66, the high of February 17.

The euro came under broad selling pressure after initial attempts by Greece’s largest party, New Democracy, to form a coalition government collapsed on Monday, following weekend elections.

Greek political leaders were continuing to hold cross party talks amid fears that the country will not have a government in place in time to secure its next tranche of international aid next month, as new elections look increasingly likely.

Investors were also jittery amid concerns over new French president-elect, Socialist Francois Hollande who has said he wants to renegotiate the euro zone’s fiscal pact in order to stimulate growth in the region.

The events overshadowed official data showing earlier that German industrial production jumped 2.8% in March, easily surpassing expectations for a 0.8% increase, after declining in each of the previous three months.

Elsewhere, the yen was fractionally higher against the U.S. dollar with USD/JPY inching down 0.07%, to hit 79.83.

Later in the day, European Central Bank President Mario Draghi was due to speak in Frankfurt.


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