Investing.com - The euro erased gains against the U.S. dollar on Tuesday, as ongoing uncertainty over talks aimed at restructuring Greece’s debt overshadowed stronger-than-forecast euro zone PMI data.
EUR/USD pulled away from 1.3063, the pair’s highest since January 4, to hit 1.2978 during early U.S. trade, shedding 0.25%.
The pair was likely to find support at 1.2874, Monday’s low and resistance at 1.3063, the session high.
On Monday, euro zone finance ministers said Greece’s creditors would have to accept lower interest rates on new bonds to be issued to replace their existing holdings as part of the debt restructuring.
The agreement is a precondition for Athens to receive its next tranche of bailout funds in order to avert a default when an EUR14.4 billion bond redemption comes due on March 20.
The euro weakened after ratings agency Standard & Poor’s said it was likely to put Greece into "selective default" once negotiations on the restructuring deal have concluded.
The single currency was boosted earlier after preliminary data showed that manufacturing activity in the euro zone rose at the fastest pace since August this month, easing concerns over the impact of the region’s debt crisis on the economy.
Service sector activity in the shared currency zone accelerated to a five-month high in January.
A separate report showed that industrial new orders in the euro zone declined in November, albeit at a slower pace than expected.
The euro was also lower against the pound, with EUR/GBP shedding 0.38% to hit 0.8327.
Elsewhere Tuesday, Spain auctioned EUR2.51 billion of short-term government debt, in an auction which met with robust investor demand at sharply lower yields.
The auction came one day after the Bank of Spain said it expects the economy to contract by 1.5% this year and grow just 0.2% in 2013.
EUR/USD pulled away from 1.3063, the pair’s highest since January 4, to hit 1.2978 during early U.S. trade, shedding 0.25%.
The pair was likely to find support at 1.2874, Monday’s low and resistance at 1.3063, the session high.
On Monday, euro zone finance ministers said Greece’s creditors would have to accept lower interest rates on new bonds to be issued to replace their existing holdings as part of the debt restructuring.
The agreement is a precondition for Athens to receive its next tranche of bailout funds in order to avert a default when an EUR14.4 billion bond redemption comes due on March 20.
The euro weakened after ratings agency Standard & Poor’s said it was likely to put Greece into "selective default" once negotiations on the restructuring deal have concluded.
The single currency was boosted earlier after preliminary data showed that manufacturing activity in the euro zone rose at the fastest pace since August this month, easing concerns over the impact of the region’s debt crisis on the economy.
Service sector activity in the shared currency zone accelerated to a five-month high in January.
A separate report showed that industrial new orders in the euro zone declined in November, albeit at a slower pace than expected.
The euro was also lower against the pound, with EUR/GBP shedding 0.38% to hit 0.8327.
Elsewhere Tuesday, Spain auctioned EUR2.51 billion of short-term government debt, in an auction which met with robust investor demand at sharply lower yields.
The auction came one day after the Bank of Spain said it expects the economy to contract by 1.5% this year and grow just 0.2% in 2013.