Investing.com - The euro was down more than 1% against the U.S. dollar on Thursday, as fears over the financial crisis in the euro zone kept the currency under heavy selling pressure and overshadowing stronger-than-expected U.S. employment data.
EUR/USD hit 1.2785 during U.S. morning trade, the pair’s lowest since September 13, 2010; the pair subsequently consolidated at 1.2810, falling 1.01%.
The pair was likely to find support at 1.2700 and resistance at 1.2946, the session high.
Concerns over the health of the euro zone banking sector intensified after a report on Wednesday showed that that overnight deposits at the European Central Bank reached an all-time high this week, indicating that European banks remain unwilling to lend to each other.
Meanwhile, shares in Italian lender UniCredit were down sharply for a second day, as the bank sold stock to increase capital.
Earlier Thursday, France sold EUR4.02 billion of 10-year bonds in an auction which met with solid demand but saw the average yield rise to 3.29%, compared with 3.18% at a similar auction last month.
France is seen as vulnerable to losing its triple-A credit rating in the coming weeks, after it was put on negative watch by ratings agencies Standard & Poor’s and Fitch’s in December, amid concerns over the handling of the financial crisis in the euro zone.
Elsewhere, official data showed that German retail sales dropped unexpectedly in November, declining for the second consecutive month.
A separate report showed that euro zone industrial new orders rose less-than-expected in October, while September’s figure was revised down sharply.
In the U.S., payroll processing firm ADP said non-farm private employment posted the largest monthly gain since December 2010 last month, increasing by a seasonally adjusted 325,000, blowing past expectations for an increase of 175,000.
The previous month’s figure was revised up to a gain of 204,000 from a previously reported increase of 206,000.
A separate report showed that the number of people who filed for unemployment assistance in the U.S. last week fell more-than-expected, dropping by 15,000 to a seasonally adjusted 372,000, beating expectations for a decline to 375,000.
The euro was also sharply lower against the pound and the yen, with EUR/GBP slipping 0.21% to trade close to a 16-month low at 0.8268 and EUR/JPY falling 0.57% to hit 98.71, the lowest level since December 2000.
Also Thursday, a report showed that service sector activity in the U.S. rose less-than-expected last month.
The Institute of Supply Management said its non-manufacturing purchasing manager's index rose by 0.6 points to 52.6 in December from a reading of 52.0 the previous month. Analysts had expected the index to rise by 1.0 point to 53.0 in December.
EUR/USD hit 1.2785 during U.S. morning trade, the pair’s lowest since September 13, 2010; the pair subsequently consolidated at 1.2810, falling 1.01%.
The pair was likely to find support at 1.2700 and resistance at 1.2946, the session high.
Concerns over the health of the euro zone banking sector intensified after a report on Wednesday showed that that overnight deposits at the European Central Bank reached an all-time high this week, indicating that European banks remain unwilling to lend to each other.
Meanwhile, shares in Italian lender UniCredit were down sharply for a second day, as the bank sold stock to increase capital.
Earlier Thursday, France sold EUR4.02 billion of 10-year bonds in an auction which met with solid demand but saw the average yield rise to 3.29%, compared with 3.18% at a similar auction last month.
France is seen as vulnerable to losing its triple-A credit rating in the coming weeks, after it was put on negative watch by ratings agencies Standard & Poor’s and Fitch’s in December, amid concerns over the handling of the financial crisis in the euro zone.
Elsewhere, official data showed that German retail sales dropped unexpectedly in November, declining for the second consecutive month.
A separate report showed that euro zone industrial new orders rose less-than-expected in October, while September’s figure was revised down sharply.
In the U.S., payroll processing firm ADP said non-farm private employment posted the largest monthly gain since December 2010 last month, increasing by a seasonally adjusted 325,000, blowing past expectations for an increase of 175,000.
The previous month’s figure was revised up to a gain of 204,000 from a previously reported increase of 206,000.
A separate report showed that the number of people who filed for unemployment assistance in the U.S. last week fell more-than-expected, dropping by 15,000 to a seasonally adjusted 372,000, beating expectations for a decline to 375,000.
The euro was also sharply lower against the pound and the yen, with EUR/GBP slipping 0.21% to trade close to a 16-month low at 0.8268 and EUR/JPY falling 0.57% to hit 98.71, the lowest level since December 2000.
Also Thursday, a report showed that service sector activity in the U.S. rose less-than-expected last month.
The Institute of Supply Management said its non-manufacturing purchasing manager's index rose by 0.6 points to 52.6 in December from a reading of 52.0 the previous month. Analysts had expected the index to rise by 1.0 point to 53.0 in December.