Investing.com – The euro eased off a four-and-a-half-month high against the U.S. dollar on Tuesday, as growing political uncertainty in Portugal and a sharp increase in the yield on Irish two-year bonds fanned fears over the regions sovereign debt crisis.
EUR/USD retreated from 1.4248, the pair’s highest since November 4 to hit 1.4195 during early U.S. trade, slipping 0.21%.
The pair was likely to find support at 1.4138, Monday’s low and short-term resistance at 1.4248, the day’s high.
Earlier in the day, Portugal’s main opposition party indicated that it would not support the minority government’s call for an additional round of austerity measures, bringing the country closer to a snap election and adding to fears that the country will be forced to seek an international bailout.
Meanwhile, speculation that Ireland’s banks would have trouble repaying debt saw the yield on Irish two-year notes rise to 10%.
However, the single currency remained supported after a senior European Central Bank policymaker said earlier that the banks near-term inflation outlook remained unchanged in the wake of Japan’s triple disaster, underlining expectations that the bank will raise interest rates next month.
The euro was also lower against the yen, with EUR/JPY sliding 0.22% to hit 114.99.
Also Tuesday, Japan's Finance Minister Yoshihiko Noda said earlier that the Group of Seven leading industrialized nations would continue to cooperate after a joint intervention to curb the yen’s record gains last week brought a degree of certainty back to markets.
EUR/USD retreated from 1.4248, the pair’s highest since November 4 to hit 1.4195 during early U.S. trade, slipping 0.21%.
The pair was likely to find support at 1.4138, Monday’s low and short-term resistance at 1.4248, the day’s high.
Earlier in the day, Portugal’s main opposition party indicated that it would not support the minority government’s call for an additional round of austerity measures, bringing the country closer to a snap election and adding to fears that the country will be forced to seek an international bailout.
Meanwhile, speculation that Ireland’s banks would have trouble repaying debt saw the yield on Irish two-year notes rise to 10%.
However, the single currency remained supported after a senior European Central Bank policymaker said earlier that the banks near-term inflation outlook remained unchanged in the wake of Japan’s triple disaster, underlining expectations that the bank will raise interest rates next month.
The euro was also lower against the yen, with EUR/JPY sliding 0.22% to hit 114.99.
Also Tuesday, Japan's Finance Minister Yoshihiko Noda said earlier that the Group of Seven leading industrialized nations would continue to cooperate after a joint intervention to curb the yen’s record gains last week brought a degree of certainty back to markets.