Forex - EUR/USD remains lower amid debt concerns

Published 10/03/2011, 07:55 AM
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Investing.com - The euro remained lower against the U.S. dollar on Monday, hovering close to an eight-month low amid ongoing concerns over the euro zone debt crisis and a potential Greek default.

EUR/USD hit 1.3314 during European afternoon trade, the pair's lowest since January 18; the pair subsequently consolidated at 1.3342, shedding 0.33%.

The pair was likely to find support at 1.3088, the low of January 13 and resistance at 1.3522, the high of January 20.

The single currency came under pressure earlier, after Greece's Prime Minister acknowledged on Sunday that the country will miss this year's deficit targets.

A draft of the 2012 budget showed a deficit of 8.5% of gross domestic product for 2011, falling short of a target of 7.6%.

The Greek government announced that thousands of public-sector jobs will be slashed and that a new EUR6.6 billion austerity plan had been approved for 2011 and 2012 in an attempt to bring the country's budget back on track.

Inspectors from the European Union, the International Monetary Fund and the European Central Bank held discussions in Athens over the weekend and will soon decide whether the country is eligible to receive further financial assistance.

Meanwhile, commenting on events in the single currency bloc, European Central Bank policymaker Ewald Nowotny said banks are still having trouble finding long-term liquidity on the markets, suggesting that the ECB may reintroduce one-year liquidity operations, last used at the end of 2009.

Elsewhere, the euro was up against the pound with EUR/GBP rising 0.12%, to trade at 0.8601.

Later in the day, the U.S. Institute of Supply Management was to publish data on manufacturing activity.

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