Forex - EUR/USD falls on output data, Greek budget concerns

Published 11/09/2012, 01:10 PM
Updated 11/09/2012, 01:11 PM
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Investing.com - The euro fell against the dollar on Friday after industrial output data disappointed in France and Italy.

Greece's parliament is due to vote on its 2013 budget on Sunday, and investors largely avoided the single currency to await results.

In U.S. trading on Friday, EUR/USD was trading down 0.20% at 1.2721, up from a session low of 1.2690, and off from a high of 1.2790.

The pair is likely to find support at 1.2690, a two-month low, and resistance at 1.2790, the earlier high.

French industrial production fell 2.7% in September, way more than market calls for a 1% decline, and off from 1.9% gain in August.

In Italy, industrial production dropped 1.5% in September, slightly worse than expectations for a 1.4% drop and way below a 1.7% increase in August.

The data sent the euro falling against the greenback as did Greek financing concerns.

The country hopes to tap a EUR31.5 billion tranche of aid after pushing through austerity measures that aim narrow deficits.

Investors were waiting for the Greek parliament to vote Sunday on its 2013 budget.

The budget must be passed to tap rescue funding packages.

However, German Finance Minister Wolfgang Schaeuble said next week may still be too early to decide on disbursing aid to Athens even though parliament approved austerity measures.

The dollar, meanwhile, continued to see safe-haven demand over growing fears the U.S. may drive over a fiscal cliff next year.

At the end of this year, tax breaks are set to expire at the same time cuts to government spending are scheduled to kick in, a combination known as a fiscal cliff that could send the country into a recession next year if left unchecked by Congress.

Fears Democrats and Republicans will engage in partisan bickering and fail to compromise continued to quell appetite for risk on Friday, which was bullish for the dollar.

The euro, meanwhile, was up against the pound and down against the yen, with EUR/GBP trading up 0.24% at 0.7993, and EUR/JPY trading down 0.19% at 101.11.







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