Investing.com - The euro dipped against the U.S. dollar on Tuesday on fears Spain will feel the strain bailing out a key bank.
The euro saw some support from polls indicating a pro-bailout political party in Greece will win enough votes in upcoming elections and form a coalition government committed to sticking with the euro.
In Asian trading on Tuesday, EUR/USD was trading down 0.14% at 1.2524, up from a session low of 1.2523, and off from a high of 1.2548.
The pair was likely to test support at 1.2497, the low of May 25, and resistance at 1.2579, the high of May 27.
The euro enjoyed support from weekend polls showing Greece's conservative New Democracy party was holding an edge over its leftist rival Syriza ahead of June 17 parliamentary elections.
A strong showing by New Democracy could lead to the formation of a coalition government in favor of sticking with the euro and bailout funding, while a strong Syriza showing could see a rejection of austerity measures that would halt bailout money and up the risk of a Greek exit.
Meanwhile in Spain, the yield on the 10-year bond shot up to 6.47% earlier, the highest this year, which ultimately sent the unit falling.
Spain’s government is set to arrange a EUR19 billion recapitalization package for one of the country’s largest commercial lenders, Bankia, which weighed down on the euro, as worries persisted that the Spanish government may need to use sovereign debt to shore up the financial institution.
The euro, meanwhile, was down against the pound and down against the yen, with EUR/GBP down 0.09% at 0.7991 and EUR/JPY trading down 0.03% at 99.64.
On Tuesday, the U.S. Conference Board's consumer confidence index will hit the wire, while in Europe, German inflation data and Spanish retails sales figures will publish as well.
Markets will keep an eye down the road to Friday's U.S. jobs report.
Worse-than-expected unemployment data could weaken the dollar by fueling talk the Federal Reserve will stimulate the economy via monetary easing.
The euro saw some support from polls indicating a pro-bailout political party in Greece will win enough votes in upcoming elections and form a coalition government committed to sticking with the euro.
In Asian trading on Tuesday, EUR/USD was trading down 0.14% at 1.2524, up from a session low of 1.2523, and off from a high of 1.2548.
The pair was likely to test support at 1.2497, the low of May 25, and resistance at 1.2579, the high of May 27.
The euro enjoyed support from weekend polls showing Greece's conservative New Democracy party was holding an edge over its leftist rival Syriza ahead of June 17 parliamentary elections.
A strong showing by New Democracy could lead to the formation of a coalition government in favor of sticking with the euro and bailout funding, while a strong Syriza showing could see a rejection of austerity measures that would halt bailout money and up the risk of a Greek exit.
Meanwhile in Spain, the yield on the 10-year bond shot up to 6.47% earlier, the highest this year, which ultimately sent the unit falling.
Spain’s government is set to arrange a EUR19 billion recapitalization package for one of the country’s largest commercial lenders, Bankia, which weighed down on the euro, as worries persisted that the Spanish government may need to use sovereign debt to shore up the financial institution.
The euro, meanwhile, was down against the pound and down against the yen, with EUR/GBP down 0.09% at 0.7991 and EUR/JPY trading down 0.03% at 99.64.
On Tuesday, the U.S. Conference Board's consumer confidence index will hit the wire, while in Europe, German inflation data and Spanish retails sales figures will publish as well.
Markets will keep an eye down the road to Friday's U.S. jobs report.
Worse-than-expected unemployment data could weaken the dollar by fueling talk the Federal Reserve will stimulate the economy via monetary easing.