Investing.com - The euro held steady against the U.S. dollar on Tuesday, as investors remained cautious ahead of a meeting of European Union finance ministers later in the day, after euro zone officials agreed on the terms of a bailout for Spanish banks on Monday.
EUR/USD hit 1.2281 during European afternoon trade, the daily low; the pair subsequently consolidated at 1.2308, inching down 0.02%.
The pair was likely to find support at 1.2254, Monday’s low and a two-year low and resistance at 1.2400, the high of July 6.
Market sentiment remained fragile as markets eyed talks between EU finance ministers, after their euro zone counterparts held a previous meeting on Monday.
Euro zone ministers agreed on Monday to make EUR30 billion in aid available to assist Spain’s struggling banking sector by the end of the month, while also supporting plans to extend Spain’s deficit target deadline by one year to 2014.
They made no apparent progress, however, on activating the bloc's rescue funds to intervene in bond markets and bring down Spain and Italy’s spiraling borrowing costs.
Spain’s 10-year government bonds eased to 6.9% earlier, moving below the critical 7% threshold which is widely seen as unsustainable in the long term.
Markets were also jittery as Germany's top court was due to decide whether the EU's permanent bailout fund is compatible with national law, potentially leading to deeper fiscal integration within the region.
Meanwhile, fears over global economic growth intensified after official data showed that Chinese exports and imports in June slowed from the previous month, as weakening global demand weighed.
Elsewhere, the euro was also little changed against the pound with EUR/GBP easing 0.03%, to hit 0.7927.
Also Tuesday, official data showed that French industrial production tumbled 1.9% in May, far more than expectations for a 0.9% fall and following a 1.4% rise the previous month.
EUR/USD hit 1.2281 during European afternoon trade, the daily low; the pair subsequently consolidated at 1.2308, inching down 0.02%.
The pair was likely to find support at 1.2254, Monday’s low and a two-year low and resistance at 1.2400, the high of July 6.
Market sentiment remained fragile as markets eyed talks between EU finance ministers, after their euro zone counterparts held a previous meeting on Monday.
Euro zone ministers agreed on Monday to make EUR30 billion in aid available to assist Spain’s struggling banking sector by the end of the month, while also supporting plans to extend Spain’s deficit target deadline by one year to 2014.
They made no apparent progress, however, on activating the bloc's rescue funds to intervene in bond markets and bring down Spain and Italy’s spiraling borrowing costs.
Spain’s 10-year government bonds eased to 6.9% earlier, moving below the critical 7% threshold which is widely seen as unsustainable in the long term.
Markets were also jittery as Germany's top court was due to decide whether the EU's permanent bailout fund is compatible with national law, potentially leading to deeper fiscal integration within the region.
Meanwhile, fears over global economic growth intensified after official data showed that Chinese exports and imports in June slowed from the previous month, as weakening global demand weighed.
Elsewhere, the euro was also little changed against the pound with EUR/GBP easing 0.03%, to hit 0.7927.
Also Tuesday, official data showed that French industrial production tumbled 1.9% in May, far more than expectations for a 0.9% fall and following a 1.4% rise the previous month.