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Forex - EUR/USD cools gains from hopes of waning European debt crisis

Published 12/03/2012, 07:49 PM
Updated 12/03/2012, 07:50 PM
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Investing.com - Profit taking weakened the euro against the dollar in early Asian trading on Tuesday after the unit posted strong gains earlier on hopes the European debt crisis may be abating.

In Asian trading on Tuesday, EUR/USD was trading down 0.04% at 1.3049, up from a session low of 1.3046, and off from a high of 1.3065.

The pair was likely to find support at 1.2939, Thursday’s low, and resistance at 1.3076, Monday's high.

Greece earlier announced it would buy back EUR10 billion in government debt, a requirement for Athens to tap bailout packages totaling EUR44 billion.

Spain, meanwhile, officially submitted a request for EUR37 billion in aid to prop up its banking sector, which has already won E.U. approval.

Events in both Greece and Spain boosted spirits and instilled hopes that the European debt crisis may be abating and giving way to blue skies ahead.

Investors largely shrugged off lackluster European factory data.

A final eurozone manufacturing purchasing managers’ index remained unchanged at 46.2 in November, the highest level since March, though still stuck in contraction territory for the 16th consecutive month.

Meanwhile in the U.S., manufacturing activity weakened unexpectedly in November, shrinking for the first time in three months.

In a report, the Institute for Supply Management revealed that its index of purchasing managers fell to 49.5 in November from 51.7 in October.

Analysts had expected the ISM index of purchasing managers to decline to only 51.3 in November.

The euro, meanwhile, was down against the pound and down against the yen, with EUR/GBP trading down 0.04% at 0.8109, and EUR/JPY trading down 0.19% at 107.17.

In the eurozone later Tuesday, Spain will release government data on the change in the number of unemployed people, a leading indicator of economic health.

Elsewhere, finance ministers from the European Union will hold talks in Brussels.








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