Forex - EUR/USD dips as market awaits word on Greece

Published 02/20/2012, 07:45 PM
Updated 02/20/2012, 07:48 PM
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Investing.com - The euro dipped against the dollar on Tuesday as investors shorted the currency for profits to await official word that European leaders have inked an agreement to bail out Greece with a EUR130 billion rescue package.

European leaders were hammering out the details behind the rescue facility by the time that Asian markets were open, which gave investors time wait for some kind of official announcement before making more substantial moves on the euro.

In early Asian trading on Tuesday, EUR/USD hit 1.3206, down 0.27%, gaining from a session low of 1.3200 and off from a high of 1.3254.

The pair was likely to test support at 1.3115, Friday's low, and resistance at 1.3277, Monday's high.

European leaders spent late Monday working on the details needed to officially hand over Athens the aid, including contributions from central banks as well as debt exchanges involving private investors in Greek bonds.

German Finance Minister Wolfgang Schaeuble stated he was confident the deal would close although he pointed out there was much work to do.

Meanwhile, global appetite for risk carried over into Tuesday in wake of China's decision to cut the reserve requirements it applies to the country's financial institutions by 50 basis points, a sign that Beijing favors more growth-oriented policies.

The move bolstered the euro as well prior to early Asian selling.

The euro, meanwhile, was down against the pound and down against the yen, with EUR/GBP losing 0.08% to 0.8347 and EUR/JPY down 0.21% at 105.22.

Greece will serve as the market's top weather vane on Tuesday as hints of fresh setbacks could spark a rush to the greenback.

In Europe, Switzerland is to produce government data on trade balance while the U.K. is to release official data on public sector net borrowing.

Eurozone consumer confidence figures are due out as well.






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