Investing.com - The euro dipped against the dollar on Monday, erasing Friday's gains from hopes that Spain is growing closer to formally requesting a bailout.
In Asian trading on Monday, EUR/USD was trading down 0.07% at 1.2944, up from a session low of 1.2943, and off from a high of 1.2960.
The pair was likely to find support at 1.2824, Thursday’s low, and resistance at 1.3015, Monday’s high.
Market talk suggesting that Spain may be closer to requesting a bailout sent the pair gaining on Friday before profit-taking sent it back down on Monday.
Last week, Standard & Poor's said it lowered Spain's long-term credit rating to 'BBB-' from 'BBB+' and cut its short-term credit rating to 'A-3' from 'A-2'.
The ratings agency said Spain's deepening economic recession is limiting the Spanish government's policy options and added that rising unemployment and spending constraints are likely to fuel social discontent and contribute to friction between Spain's central and regional governments.
"In our view, the capacity of Spain's political institutions (both domestic and multilateral) to deal with the severe challenges posed by the current economic and financial crisis is declining," Standard & Poor's said in a statement.
The news prompted many investors to interpret the downgrade as a tipping point pushing Madrid closer to requesting financial aid from its neighbors.
A bailout would allow the European Central Bank to step in and buy Spanish sovereign debt in the secondary market, which would lower borrowing costs in the crisis-weary country.
Investors also stocked up on dollar positions on Monday as part of a wait-and-see trading session ahead of a flurry of data due out of the U.S. this week, including reports on retail sales, manufacturing activity, initial jobless claims and housing starts, among others.
Earnings season is under way in the U.S. as well, and investors stayed in safe-haven dollar positions ahead of time.
The euro, meanwhile, was down slightly against the pound and down against the yen, with EUR/GBP trading down 0.01% at 0.8059, and EUR/JPY trading down 0.05% at 101.56.
On Monday, the U.S. is to produce official data on retail sales, an indicator of consumer spending, which accounts for the majority of economic activity.
In addition, the U.S. is to release data on manufacturing activity in New York state, as well as official data on business inventories.
In Asian trading on Monday, EUR/USD was trading down 0.07% at 1.2944, up from a session low of 1.2943, and off from a high of 1.2960.
The pair was likely to find support at 1.2824, Thursday’s low, and resistance at 1.3015, Monday’s high.
Market talk suggesting that Spain may be closer to requesting a bailout sent the pair gaining on Friday before profit-taking sent it back down on Monday.
Last week, Standard & Poor's said it lowered Spain's long-term credit rating to 'BBB-' from 'BBB+' and cut its short-term credit rating to 'A-3' from 'A-2'.
The ratings agency said Spain's deepening economic recession is limiting the Spanish government's policy options and added that rising unemployment and spending constraints are likely to fuel social discontent and contribute to friction between Spain's central and regional governments.
"In our view, the capacity of Spain's political institutions (both domestic and multilateral) to deal with the severe challenges posed by the current economic and financial crisis is declining," Standard & Poor's said in a statement.
The news prompted many investors to interpret the downgrade as a tipping point pushing Madrid closer to requesting financial aid from its neighbors.
A bailout would allow the European Central Bank to step in and buy Spanish sovereign debt in the secondary market, which would lower borrowing costs in the crisis-weary country.
Investors also stocked up on dollar positions on Monday as part of a wait-and-see trading session ahead of a flurry of data due out of the U.S. this week, including reports on retail sales, manufacturing activity, initial jobless claims and housing starts, among others.
Earnings season is under way in the U.S. as well, and investors stayed in safe-haven dollar positions ahead of time.
The euro, meanwhile, was down slightly against the pound and down against the yen, with EUR/GBP trading down 0.01% at 0.8059, and EUR/JPY trading down 0.05% at 101.56.
On Monday, the U.S. is to produce official data on retail sales, an indicator of consumer spending, which accounts for the majority of economic activity.
In addition, the U.S. is to release data on manufacturing activity in New York state, as well as official data on business inventories.