Forex - EUR/USD steady up after hitting 22-month low

Published 05/23/2012, 07:31 PM
Updated 05/23/2012, 07:35 PM
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Investing.com - The euro was up steady against the U.S. dollar on Thursday, recovering after tanking to an earlier 22-month low on fears Greece is headed for the eurozone's exit door and its neighbors are doing little to stop it.

In Asian trading on Thursday, EUR/USD was trading up 0.02% at 1.2584, up from a session low of 1.2576, and off from a high of 1.2599.

The pair was likely to test support at 1.2546, the low of the previous U.S. session, and resistance at 1.2815, the high of May 22.

Greece is fast approaching June 17 parliamentary elections, where anti-austerity candidates may grab enough power and reject belt-tightening measures the country accepted in exchange for bailout money, a scenario that could usher Greece out of the currency zone.

A summit of European leaders took place earlier in the day although markets are nervous the meeting will produce no concrete measures to tackle the crisis.

Talk that countries are quietly making contingency plans to deal with a Greek eurozone exit spooked investors as well, even though public leaders, including former Greek Prime Minister Lucas Papademos, played down such reports.

Investors also grew increasingly nervous on expectations that France under the leadership of socialist Francois Hollande may disagree with neighbor Germany over how to steer the continent out of the crisis going forward.

Both nations harbored similar policy views under France's previous president, Nicolas Sarkozy, although Hollande has said the continent needs to focus more on growth and less on austerity.

In the U.S. meanwhile, the U.S. Census Bureau said new home sales in April rose by 3.3% to a seasonally adjusted 343,000 units, above expectations for a gain of 2.1% to 335,000, which was bullish for the greenback.

The euro, meanwhile, was up against the pound and down against the yen, with EUR/GBP up 0.06% at 0.8022 and EUR/JPY trading down 0.05% at 100.06.

Later Thursday, the eurozone will release preliminary data on manufacturing and service sector growth, while Germany and France are also to release individual reports.

Germany will also unveil revised first-quarter gross domestic product data and a report on business climate.

Later in the day, ECB president Mario Draghi is due to speak in public, and markets will move on any indication of the future possible direction of monetary policy.

The U.S. will release data on core durable goods orders and a separate report on initial jobless claims.






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