Investing.com - The euro traded sharply lower against the U.S. dollar Tuesday, as global growth worries pressure the single currency and the ongoing euro zone debt crisis weighs on sentiment.
EUR/USD traded at 1.2879 in U.S. afternoon action, falling 0.69%.
The pair was likely to find support at 1.2802, the low of October 1 and resistance at 1.2990, the session high.
Overall market sentiment was hit after the International Monetary Fund cut its forecast for global growth this year to 3.3% from 3.5% and warned that a failure by European and U.S. policymakers to tackle current problems could threaten what it said was an already “slow and bumpy” economic recovery.
The euro remained under pressure amid uncertainty over how soon Spain may formally request a bailout after euro zone finance ministers said Monday that Madrid did not need external financial aid yet.
Investors also remained cautious amid ongoing uncertainty over whether international creditors will extend loans to Greece, as the country struggles to meet deficit reduction targets.
Earlier Tuesday, German Chancellor Angel Merkel said that Greece was on a “tough path” following talks with Prime Minister Antonis Samaras in Athens, but added that she believed austerity would pay off.
The euro extended losses against the pound and the yen, with EUR/GBP down 0.56% to 0.8055 and EUR/JPY falling 0.83% to 100.75.
Also Tuesday, European Central Bank President Mario Draghi reiterated that governments cannot rely on the ECB to fix the crisis in the region and said that national reforms were vital.
In testimony to the European Parliament, Mr. Draghi also warned that he expected economic activity in the euro zone to remain weak, calling the road ahead long and uphill.