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Forex - EUR/USD remains lower as Syria worries dominate

Published 08/28/2013, 10:15 AM
EUR/USD
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EUR/GBP
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Investing.com - The euro remained lower against the U.S. dollar on Wednesday, after the realease of downbeat U.S. pending home sales data as concerns over a possible military intervention in Syria continued to dominate market sentiment.

EUR/USD hit 1.3305 during U.S. morning trade, the pair's lowest since August 22; the pair subsequently consolidated at 1.3319, retreating 0.55%.

The pair was likely to find support at 1.3205, the low of August 15 and resistance at 1.3398, the session high.

Investors shrugged off industry data showing that U.S. pending home sales declined 1.3% in July, more than the expected 0.5% fall, after a 0.4% loss the previous month.

Risk sentiment remained under pressure amid growing indications that the U.S. and its allies were preparing to launch a military strikes against the Syria following the alleged use of chemical weapons.

British Prime Minister David Cameron drafted a United Nations resolution condemning the use of chemical weapons in Syria and "authorizing necessary measures to protect civilians" on Wednesday. The resolution was to be put forward at a meeting of the UN Security Council later in the day.

In the euro zone, data earlier showed that the Gfk German consumer climate index ticked down to 6.9 in August from a reading of 7.0 the previous month. Analysts had expected the index to rise to 7.1 this month.

The euro was lower against the pound with EUR/GBP shedding 0.39%, to hit 0.8581.

Also Wednesday, Bank of England Governor Mark Carney said the BoE was ready to add stimulus if investor expectations for higher interest rates rise too far and undermine the U.K.'s economic recovery.

Earlier in the month, Carney said BoE policy makers plan to keep the benchmark interest rate at a record-low 0.5% for at least three years.

However, recent indications of strengthening U.K. growth have prompted investors to speculate over a rise in interest rates sooner than expected.


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