Investing.com - The euro weakened against the dollar Monday as investors sold the European currency and jumped to the sidelines to see whether a meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel will lead to a way out of the debt crisis.
EUR/USD hit 1.2680 in early Asian Monday trading, down 0.31%, up from a session low of 1.2667 and off from a high of 1.2707.
The pair was likely to test support at 1.2667, Monday’s low, and resistance at 1.3077, Tuesday’s high.
Financing concerns continue to plague a large swathe of the continent.
France on Thursday sold EUR4.02 billion of 10-year bonds, and while demand was solid, yields were high, as ratings agencies have threatened to strip France of its triple-A credit rating early this year.
Turnout at German bond auctions has been low, while closer to the epicenter of the crisis in Italy, yields on government debt have spiked above 7%.
European countries recently pledged to better coordinate fiscal policies, and on Jan. 9, Sarkozy and Merkel are expected to meet and provide some direction to make good on those pledges.
The dollar, meanwhile, remained in favor with investors early Monday in wake of last Friday's announcement that the U.S. added a net 200,000 nonfarm payrolls to the economy in December, which was above expectations.
Many experts agreed now is the time to sit and wait for concrete policy announcements out of Europe to drive the continent's economy back into growth mode.
"We’re going to see more ongoing political noise and that’s really just a distraction from the bigger driver of the euro, which is the relatively weak growth outlook,” said Mike Jones, a currency strategist at Bank of New Zealand in Wellington, according to Bloomberg.
"As long as European growth underwhelms, the euro will continue to underperform the U.S. dollar, yen and probably also the rest of the major currencies."
Meanwhile, the euro was down against the pound and down against the yen, with EUR/GBP sliding 0.14% to 0.8234 and EUR/JPY falling 0.27% at 97.61.
On Monday, markets will await a eurozone report on investor confidence in the currency bloc, as well as data on German industrial output.
Also Monday, Federal Reserve Open Market Committee member Dennis Lockhart is set to speak and may touch on the outlook for U.S. monetary policy.
U.S. consumer credit figures will be released while in Europe, traders will keep an eye on Swiss unemployment and retail sales figures.
Also on Monday, data on changes in U.K. home prices will hit the wire as will Chinese trade balance figures.
EUR/USD hit 1.2680 in early Asian Monday trading, down 0.31%, up from a session low of 1.2667 and off from a high of 1.2707.
The pair was likely to test support at 1.2667, Monday’s low, and resistance at 1.3077, Tuesday’s high.
Financing concerns continue to plague a large swathe of the continent.
France on Thursday sold EUR4.02 billion of 10-year bonds, and while demand was solid, yields were high, as ratings agencies have threatened to strip France of its triple-A credit rating early this year.
Turnout at German bond auctions has been low, while closer to the epicenter of the crisis in Italy, yields on government debt have spiked above 7%.
European countries recently pledged to better coordinate fiscal policies, and on Jan. 9, Sarkozy and Merkel are expected to meet and provide some direction to make good on those pledges.
The dollar, meanwhile, remained in favor with investors early Monday in wake of last Friday's announcement that the U.S. added a net 200,000 nonfarm payrolls to the economy in December, which was above expectations.
Many experts agreed now is the time to sit and wait for concrete policy announcements out of Europe to drive the continent's economy back into growth mode.
"We’re going to see more ongoing political noise and that’s really just a distraction from the bigger driver of the euro, which is the relatively weak growth outlook,” said Mike Jones, a currency strategist at Bank of New Zealand in Wellington, according to Bloomberg.
"As long as European growth underwhelms, the euro will continue to underperform the U.S. dollar, yen and probably also the rest of the major currencies."
Meanwhile, the euro was down against the pound and down against the yen, with EUR/GBP sliding 0.14% to 0.8234 and EUR/JPY falling 0.27% at 97.61.
On Monday, markets will await a eurozone report on investor confidence in the currency bloc, as well as data on German industrial output.
Also Monday, Federal Reserve Open Market Committee member Dennis Lockhart is set to speak and may touch on the outlook for U.S. monetary policy.
U.S. consumer credit figures will be released while in Europe, traders will keep an eye on Swiss unemployment and retail sales figures.
Also on Monday, data on changes in U.K. home prices will hit the wire as will Chinese trade balance figures.