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Forex - EUR/USD extends losses as dollar sentiment remains weak

Published 10/11/2010, 11:41 AM
EUR/USD
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EUR/GBP
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Investing.com – The euro fell to a fresh daily low against the U.S. dollar on Monday, despite sentiment on the dollar remaining broadly negative amid concerns over further monetary easing by the Federal Reserve.

EUR/USD hit 1.3884 during European afternoon trade, a fresh daily low; the pair subsequently consolidated at 1.3895, shedding 0.31%.

The pair was likely to find short-term support at 1.3832, last Friday’s low and resistance at 1.4028, last Thursday’s high.

Over the weekend, meetings of International Monetary Fund members and the World Bank focused on the need for a cooperative approach to address uneven global economic growth and simmering tensions among countries vying to keep their currencies weak in order to boost export growth.

At the conclusion of the meetings, the IMF’s governing body pledged to "work towards a more balanced pattern of global growth, recognising the responsibilities of deficit and surplus countries,” although it stopped short of any move to limit currency movements.

Meanwhile, data released on Friday showed that U.S. non-farm payrolls fell unexpectedly in September, down for the fourth consecutive month. The weak data reinforced expectations that the Federal Reserve will announce new asset buying in order to boost the flagging U.S. economy, effectively devaluing the U.S. dollar.

The euro was also down against the pound, with EUR/GBP shedding 0.20% to hit 0.8736.

Also Friday, Jean-Claude Juncker, the head of the euro zone’s finance ministers, said that the euro was too strong and the single currency’s strength did not reflect the region's economic fundamentals.

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