Forex - EUR/USD dips on Greece meeting, fiscal cliff fears

Published 11/20/2012, 08:32 PM
Updated 11/20/2012, 08:33 PM
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Investing.com - The euro traded lower albeit steadily against the dollar in Asian trading on Wednesday as investors waited in standby mode to see if eurozone finance ministers will give Greece the green light to tap bailout funds.

Investors also waited for fresh news suggesting if the U.S. will avoid its fast-approaching fiscal cliff or not.

In Asian trading on Wednesday, EUR/USD was trading down 0.08% at 1.2807, up from a session low of 1.2802, and off from a high of 1.2818.

The pair was likely to find support at 1.2765, Tuesday's low, and resistance at 1.2829, Tuesday's high.

In Brussels, Eurozone policymakers opened a meeting to discuss Greece's finances, with a EUR31.5 billion tranche of aid pending approval.

The currency held steady as investors awaited an announcement.

Meanwhile in the U.S., nerves remained on edge due to uncertainty over the fiscal cliff, a combination of expiring tax breaks and inbound spending cuts converging at the same time after the end of this year.

If left unaddressed by Congress, the fiscal cliff could throw the U.S. economy into a recession next year.

Earlier, Federal Reserve Chairman Ben Bernanke urged the White House and Congress to find a way to steer the U.S. economy away from the cliff.

The euro continued to weaken on reaction to a Moody's decision to downgrade France's sovereign ratings to Aa1 from Aaa.

Elsewhere in the U.S., housing starts rose 3.6% in October to a seasonally adjusted annual rate of 894,000, the biggest gain in four years.

The number of building permits issued in October fell 2.7% to a seasonally adjusted 866,000.

Both figures beat expectations.

The euro, meanwhile, was down against the pound and up against the yen, with EUR/GBP trading down 0.08% at 0.8042, and EUR/JPY trading up 0.20% at 104.90.

Later Wednesday, the U.S. will release weekly government reports on initial jobless claims and crude oil inventories.

This data is being released one day early ahead of the Thanksgiving holiday on Thursday.

In addition, the University of Michigan is to release revised data on consumer sentiment and inflation expectations.

In Europe, Spain and Germany are to hold auctions of 10-year government bonds.







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