Forex - EUR/USD remains supported on Greece aid speculation

Published 11/14/2012, 07:36 AM
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Investing.com - The euro remained supported above a two-month high against the U.S. dollar on Wednesday, amid speculation that aid payments for Greece could be bundled into one large lump sum.

EUR/USD hit 1.2756 during European afternoon trade, the pair’s highest since November 9; the pair subsequently consolidated at 1.2732, gaining 0.22%.

The pair was likely to find support at 1.2660, Tuesday’s low and a two-month low and resistance at 1.2779, the high of November 8.

The euro remained supported after German newspaper Bild reported Tuesday that Greece could receive three bailout installments in one single payment of EUR44 billion, citing German government sources.

The euro hit session highs against the greenback earlier after Italy saw borrowing costs fall to the lowest level since October 2010 at an auction of three-year government bonds.

Italy’s Treasury sold EUR3.5 billion worth of three-year government bonds at an average yield of 2.64%, down from 2.86% at a similar auction last month.

But concerns that the economic outlook for the euro zone is worsening were underlined after official data showed that industrial production in the bloc tumbled 2.5% in September, compared to expectations for a 1.9% decline.

The euro was higher against the pound, with EUR/GBP up 0.26% to 0.8024, and rallied against the broadly weaker yen, with EUR/JPY jumping 1.18% to 102.01.

Later in the day, the U.S. was to produce government data on retail sales, producer price inflation and business inventories. In addition, the Federal Reserve was to publish the minutes of its most recent policy-setting meeting.



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