Forex - EUR/USD at 2-month low ahead of U.S. election, Greek vote

Published 11/05/2012, 10:19 AM
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Investing.com - The euro was trading close to a two-month low against the U.S. dollar on Monday, as investor demand for riskier assets was hit ahead of Tuesday’s U.S. presidential elections and a critical Greek austerity vote.

EUR/USD hit 1.2768 during U.S. morning trade, the pair’s lowest since September 11; the pair subsequently consolidated at 1.2776, shedding 0.46%.

The pair was likely to find near-term support at 1.2753, the low of September 11 and resistance at 1.2841, the session high.

Demand for the greenback was underpinned as investors focused on the outcome of Tuesday’s U.S. elections, with opinion polls pointing to a close race between incumbent President Barack Obama and Republican challenger Mitt Romney.

The single currency remained under selling pressure amid concerns over whether Greece’s parliament would approve a package of spending cuts and tax hikes in a vote on Wednesday, which will determine if Athens receives its next tranche of financial aid.

The U.S. dollar remained supported after official data on Friday showed that the U.S. economy added 171,000 jobs in October, beating forecasts for an increase of 125,000 and boosting the U.S. economic outlook.

The euro was hovering close to a five-week low against the pound, with EUR/GBP dipping 0.06% to 0.8006 and was lower against the yen, with EUR/JPY falling 0.71% to 102.54.

The dollar was little changed after a report showed that the rate of growth in the U.S. service sector slowed in October as new orders declined.

The Institute of Supply Management said its non-manufacturing purchasing manager's index fell to 54.2 from a reading of 55.1 in September.  

Analysts had expected the index to decline to 54.5 in October.



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