Forex - EUR/USD near two-week low amid Greece concerns

Published 03/05/2012, 07:25 AM
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Investing.com - The euro was steady against the U.S. dollar on Monday, trading close to a two-week low as uncertainty over the outcome of a debt restructuring deal for Greece curbed demand for riskier assets.

EUR/USD hit 1.3160 during European afternoon trade, the pair’s lowest since February 17; the pair subsequently consolidated at 1.3195, dipping 0.02%.

The pair was likely to find support at 1.3043, the low of February 15 and resistance at 1.3331, last Friday’s high.

Investors remained wary ahead of the March 8 deadline for Greece’s private creditors to join the agreement under which they will exchange their existing Greek holdings for new government bonds in a debt swap deal.

A failure to agree on the debt restructuring deal would put the country back on the brink of a sovereign debt default.

The euro found some support after official data showed that retail sales across the euro zone rose for the first time in five months in January, increasing by a seasonally adjusted 0.3%, defying expectations for a 0.1% decline.

The report came after data showing that euro zone's services sector contracted at faster rate than initially estimated in February, shrinking for the fifth time in six months.

A separate report showed that investor confidence in the euro zone improved less-than-expected this month, remaining in negative territory for the eighth consecutive month.

The euro was fractionally higher against the pound, with EUR/GBP inching up 0.02% to hit 0.8338, but remained lower against the yen, with EUR/JPY falling 0.65% to hit 107.27.

Later in the day, the U.S. was to produce government data on factory orders, while the Institute of Supply Management was to release its closely watched report on U.S. service sector growth.


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