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Forex - EUR/USD dips as Draghi warns on eurozone recovery

Published 02/18/2013, 02:09 PM
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Investing.com - The euro weakened against the dollar on Monday after European Central Bank President Mario Draghi warned that European recovery still faces headwinds.

Trading was light, as U.S. markets were closed for the President Day holiday.
In U.S. trading, EUR/USD was down 0.09% at 1.3350, up from a session low of 1.3322 and off from a high of 1.3379.

The pair was likely to find support at 1.3307, Friday's low, and resistance at 1.3520, Wednesday's high.

Draghi told the European Parliament earlier that Europe "entered 2013 in a more stable financial environment than in recent years" thanks to various economic reforms, though he warned that eurozone economy remains weak following three quarters of contraction and will only recover slowly this year.

Last week, Eurostat, the statistical arm of the European Union, reported that the eurozone's GDP contracted by 0.6% in the fourth quarter of 2012 from the third, well beyond expectations for a 0.4% decline and far surpassing g the previous 0.1% quarterly contraction.

The dip in total output represented the fastest rate of decline since 2009 and marked a third consecutive quarter of contraction.

The annualized GDP rate fell 0.9%, worse than expectations for a 0.7% contraction, after shrinking at an annualized rate of 0.6% in the previous quarter.

The euro, meanwhile, was up against the pound and up against the yen, with EUR/GBP trading up 0.31% at 0.8638, and EUR/JPY trading up 0.44% at 125.48.

On Tuesday in the eurozone, the ZEW Institute is to release its index of German economic sentiment, a leading indicator of economic health.






 

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