Forex - EUR/USD close to 3-month low, focus on E.Z. developments

Published 05/09/2012, 02:33 AM
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Investing.com - The euro was trading close to a three-month low against the U.S. dollar on Wednesday, amid sustained concerns that political uncertainty in Greece and a French leadership change may undermine austerity plans designed to tackle the euro zone's debt crisis.

EUR/USD hit 1.2966 during late Asian trade, the pair’s lowest since May 7; the pair subsequently consolidated at 1.2986, shedding 0.15%.

The pair was likely to find support at 1.2930, the low of January 25 and resistance at 1.3064, the high of May 7.

The euro remained under pressure after the leader of Greece's Left Coalition party said on Tuesday that the country's commitment to a European Union/International Monetary Fund rescue deal had become null and void.

Greece's two main pro-bailout parties failed to win a majority in weekend elections, leaving questions over the country's ability to avert bankruptcy and stay in the euro.

Investors were also eyeing developments in France, as Socialist President-elect Francois Hollande has advocated an approach to tackling the debt crisis centered more on growth, which may create tensions with Germany's insistence on fiscal austerity.

Elsewhere, the single currency was steady against the pound with EUR/GBP edging down 0.05%, to hit 0.8046.

Later in the day, the U.S. was to produce government data on crude oil stockpiles. A 10-year U.S. government bond auction was also scheduled later Wednesday.


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