Forex - EUR/USD hits 3-day low on U.S. bond yield gains

Published 12/08/2010, 02:33 AM
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Investing.com – The euro was down against the U.S. dollar on Wednesday, falling to hit a 3-day low, following significant overnight gains in U.S. treasury yields.

EUR/USD hit 1.3193 during late Asian trade, the pair’s lowest since December 3; the pair subsequently consolidated at 1.3196, shedding 0.48%.

The pair was likely to find support at 1.3059, the low of December 2 and resistance at 1.3421, the high of December 6.

U.S. Treasury yields surged on a proposed extension in U.S. tax cuts, which fuelled concerns about inflation and the cost of the country's debt burden.

Elsewhere, the Irish austerity budget on Tuesday passed the first in a series of votes to tackle what Finance Minister Brian Lenihan called the “worst crisis in our history.”

The budget, the fourth since October 2008, added about EUR14 billion to austerity measures as the government attempts to reduce the country’s deficit and gain access to an EUR85 billion international bailout package.

Meanwhile, the euro was slightly up against the pound, with EUR/GBP edging up 0.05% to hit 0.8419.

Later in the day, in the euro zone Germany was to publish data on industrial production. Earlier Wednesday, official data shoiwed that Germany's trade surplus contracted more-than-expected in October.

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