Forex - EUR/USD dips as Greece awaits fresh bailout funding

Published 11/12/2012, 08:01 PM
Updated 11/12/2012, 08:03 PM
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Investing.com - The euro fell against the dollar on Tuesday after eurozone policymakers concluded a Monday meeting without deciding when it will disburse a EUR31.5 billion tranche of aid to Greece.

The country recently agreed to EUR13.5 billion in spending cuts and tax hikes and approved a budget, both requirements for fresh rescue funds, though the single currency traded lower as eurozone policymakers reviewed details of the country's progress.

In Asian trading on Tuesday, EUR/USD was trading down 0.09% at 1.2698, up from a session low of 1.2697, and off from a high of 1.2709.

The pair was likely to find support at 1.2690, Friday’s low, and resistance at 1.2739, Monday’s high.

Greece's approval of an austere budget and agreement to push through politically unpopular spending cuts and tax hikes drew applause from market participants, though the euro slid as eurozone finance ministers reviewed the details of Greece's progress.

Eurozone finance ministers have given Athens two years to meet austerity targets though the single currency still dipped as the country is quickly running out of funding and will need a tranche of aid soon.

Eurozone policymakers are scheduled to meet again to discuss Greece's finances on Nov. 20., which weakened the euro slightly.

The country will not default as it can roll over debt in the meantime.

Meanwhile, the U.S. dollar saw continued demand as investors awaited fresh news surrounding the U.S. fiscal cliff.

At the end of this year, tax breaks are set to expire in the U.S. at the same time cuts to government spending are scheduled to kick in, a combination known as a fiscal cliff that could send the country into a recession next year if left unchecked by Congress.

Fears Democrats and Republicans will engage in partisan bickering and fail to compromise sparked safe-haven demand for the greenback.

The euro, meanwhile, was up against the pound and up against the yen, with EUR/GBP trading up 0.01% at 0.8007, and EUR/JPY trading up 0.09% at 101.13.

Later Tuesday in Europe, the ZEW Centre for Economic Research will release its closely watched report on German economic sentiment, as well as data on sentiment in the wider eurozone.

The U.S. is to release official data on the federal budget balance.









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