Forex - EUR/USD trims losses after tepid U.S. economic data

Published 12/15/2010, 10:46 AM
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Investing.com – The euro trimmed losses against the U.S. dollar on Wednesday, retreating from a 2-day low, following the release of tepid data on U.S. consumer prices and industrial production.

EUR/USD clawed up from 1.3284, the pair’s lowest since Monday to hit 1.3345 during European late afternoon trade, shedding 0.23%.

The pair was likely to find short-term support at 1.3181, Monday’s low and resistance at 1.3437, the high of December 3.

Earlier in the day, the Bureau of Labor Statistics said that core consumer prices, less food and energy rose in line with expectations in November, increasing by 0.10%, up from a flat reading in October.

Consumer prices, including food and energy costs rose less-than-expected in November, increasing by a seasonally adjusted 0.1%. Analysts had expected consumer price inflation to rise by 0.2% in November.

Year-on-year, consumer prices rose by 1.1% in November, after rising by 1.2% in October.

A separate report showed that industrial production in the U.S. rose more-than-expected in November, climbing 0.4%, slightly above expectations for a 0.3% increase.

Elsewhere, German Chancellor Angela Merkel said Wednesday that European Union leaders will adopt a deal to create a permanent mechanism for resolving sovereign debt crises when they meet later in the week.

Meanwhile, the euro was up against the pound, with EUR/GBP surging 0.64% to hit 0.8534.

Earlier in the day, Moody’s put Spain's Aa1 sovereign credit rating on review for a possible downgrade, citing high funding needs, doubts over its banking sector and concerns surrounding regional finances.

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