Forex - EUR/USD dips on Greek financing concerns, U.S. elections

Published 11/05/2012, 07:52 PM
Updated 11/05/2012, 07:54 PM
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Investing.com - The euro tracked lower against the dollar on Tuesday as investors sold the single currency on fears Greece will face home-grown opposition to austerity measures needed to secure bailout money.

The dollar, meanwhile, saw support ahead of presidential elections in the U.S. later in the day.

In Asian trading on Tuesday, EUR/USD was trading down 0.02% at 1.2794, up from a session low of 1.2793, and off from a high of 1.2803.

The pair is likely to find support at 1.2768, Monday's low, and resistance at 1.2842, Monday's high.

President Barack Obama and his Republican challenger Mitt Romney are running neck and neck in the polls, sending investors selling higher-yielding currencies and running to the safety of the dollar to await the results.

Meanwhile, concerns continued to build that Greece will run into opposition to austerity measures imposed on the country by European and multilateral creditors in exchange for bailout money.

The Greek government has sought approval for an austerity plan calling for EUR13.5 billion in spending cuts and tax hikes from Parliament, though coalition politicians have balked.

Greece must approve the reforms and pass a new budget to free up some EUR31.5 billion in aid arranged by the International Monetary Fund, the European Commission and the European Central Bank.

Some coalition politicians have said they oppose wage cuts.

Greek Prime Minister Antonis Samaras has said proposed wage cuts are the last, though investors still sidestepped the single currency to avoid uncertainty.

Greece's lawmakers due to vote on the austerity proposal on Wednesday, which could determine if Athens receives its next shot of rescue funding.

Trading was mixed, which allowed the euro to bottom out and drift into positive territory occasionally.

The euro, meanwhile, was down against slightly the pound and down against the yen, with EUR/GBP trading down 0.01% at 0.8007, and EUR/JPY trading down 0.12% at 102.62.

All eyes will remain focused on the U.S. later Tuesday in hopes of a clean and quick result, with no repeats of the 2000 election that saw recounts.

In the eurozone, Germany is to produce official data on factory orders, a leading indicator of production.









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