Forex - EUR/USD turns lower amid Spain bailout uncertainty

Published 10/03/2012, 03:26 AM
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Investing.com - The euro turned lower against the U.S. dollar on Wednesday, as uncertainty over the timing of a bailout for Spain lingered after the country’s prime minister indicated that a request would not be imminent.

EUR/USD hit 1.2877 during European morning trade, the session low; the pair subsequently consolidated at 1.2895, shedding 0.18%.

The pair was likely to find support at 1.2802, Monday’s low and a two-week low and resistance at 1.2967, Tuesday’s high.

Speaking late Tuesday, Spanish Prime Minister Mariano Rajoy ruled out a bailout request before this weekend, despite persistent speculation that Madrid was moving closer to requesting external financial aid.

The dollar found support after official data showed that growth in China’s service sector moderated in September, underlining concerns over a slowdown in the world’s second largest economy.

Also Wednesday, official data showed that Australia posted the largest trade deficit in three-and-a-half years in August as export demand slowed, one day after the country’s central bank cut interest rates for the third time in six months.

The euro was fractionally higher against the pound, with EUR/GBP inching up 0.06% to 0.8012, but slipped against the yen, with EUR/JPY losing 0.11% to trade at 100.86.

Later in the day, the euro zone was to release official data on retail sales. Meanwhile, the U.S. was to produce a report on ADP nonfarm payrolls and the Institute of Supply Management was to produce data on U.S. service sector activity.


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