Investing.com - The euro fell against the U.S. dollar on Monday after Greece failed to reach an agreement with its private creditors to avoid default.
EUR/USD traded at a low of 1.3029 and hit a high of 1.3141 prior to trading lower by 0.19% at 1.3133.
The pair was likely to find support at 1.2982, the low of December 19 and technical resistance exists at 1.3183, the high of January 26.
The single currency weakness was triggered by renewed fears that Greece will fail to reach an acceptable deal with its private creditors.
This agreement is critical for Greece to avoid default on March 20 by obtaining its next tranche of bailout funds.
French President Nicolas Sarkozy met with German Chancellor Angela Merkel today in Paris regarding the Greek situation. Merkel stated, “I don’t understand why we need a few more days—time is running out”, adding to the negative sentiment on the session.
However, Greece’s Prime Minister Lucas Papedemos reached a tentative deal with leaders of the three parties supporting his interim government. The agreement is designed to boost economic competitiveness and extend spending cuts.
During a five hour meeting yesterday, the Greek leaders agreed to make additional spending reductions equaling 1.5% of the gross domestic product.
Furthermore, Greek’s largest public and private union groups, ADEDY and GSEE called a twenty four hour general strike to protest the austerity measures.
In additional euro zone bearish news, the International Monetary Fund stated that China’s economic expansion may be cut in half by the euro zone’s debt crisis.
This Chinese crisis would warrant significant fiscal stimulus from the nation’s government. The IMF went on to state that China’s growth would drop as much as four percentage points from the fund’s current projection for an expansion of 8.2% in 2012.
Last week, Morgan Stanley slashed its fourth quarter 2012 euro forecast to USD1.15 from an earlier projection of USD1.20. The investment bank expects government budget controls to result in a region wide recession.
Adding some hope to the euro zone, German factory orders advanced more than expected in December. Demand from outside the euro zone was credited with the increase, easing economic slowdown worries in the region’s largest economy.
The euro slipped lower against the pound with EUR/GBP down 0.27% to 0.8300.
EUR/USD traded at a low of 1.3029 and hit a high of 1.3141 prior to trading lower by 0.19% at 1.3133.
The pair was likely to find support at 1.2982, the low of December 19 and technical resistance exists at 1.3183, the high of January 26.
The single currency weakness was triggered by renewed fears that Greece will fail to reach an acceptable deal with its private creditors.
This agreement is critical for Greece to avoid default on March 20 by obtaining its next tranche of bailout funds.
French President Nicolas Sarkozy met with German Chancellor Angela Merkel today in Paris regarding the Greek situation. Merkel stated, “I don’t understand why we need a few more days—time is running out”, adding to the negative sentiment on the session.
However, Greece’s Prime Minister Lucas Papedemos reached a tentative deal with leaders of the three parties supporting his interim government. The agreement is designed to boost economic competitiveness and extend spending cuts.
During a five hour meeting yesterday, the Greek leaders agreed to make additional spending reductions equaling 1.5% of the gross domestic product.
Furthermore, Greek’s largest public and private union groups, ADEDY and GSEE called a twenty four hour general strike to protest the austerity measures.
In additional euro zone bearish news, the International Monetary Fund stated that China’s economic expansion may be cut in half by the euro zone’s debt crisis.
This Chinese crisis would warrant significant fiscal stimulus from the nation’s government. The IMF went on to state that China’s growth would drop as much as four percentage points from the fund’s current projection for an expansion of 8.2% in 2012.
Last week, Morgan Stanley slashed its fourth quarter 2012 euro forecast to USD1.15 from an earlier projection of USD1.20. The investment bank expects government budget controls to result in a region wide recession.
Adding some hope to the euro zone, German factory orders advanced more than expected in December. Demand from outside the euro zone was credited with the increase, easing economic slowdown worries in the region’s largest economy.
The euro slipped lower against the pound with EUR/GBP down 0.27% to 0.8300.