Forex - Euro eases higher despite persistent worries on meeting hopes

Investing.com - The euro eased higher against the U.S. dollar  Monday, as euro zone economic crisis worries persisted and investors remained cautious prior to a meeting of the region’s finance ministers scheduled to begin later in the day.

EUR/USD hit 1.2316 during early U.S. morning trade, the daily high; the pair subsequently consolidated at 1.2300 easing higher by 0.11%.

The pair was likely to find support at 1.2256, the session low and a two-year low and resistance at 1.2400, the high of July 6.

Single currency sentiment remained weak as European Central Bank President Mario Draghi reiterated comments made last week following the bank’s decision to cut its benchmark interest rate to a record low of 0.75%, saying that economic indicators for the second quarter point to weakening growth in the euro zone.

Speaking before the European Parliament in Brussels, Draghi added that inflation will most likely decline further in 2012 and fall below 2% in 2013. 

The statement arrived as the yield on Spain’s 10-year government bonds climbed to 7.11% earlier, well above the 6% threshold, widely seen as unsustainable, ahead of a meeting of euro zone finance ministers later Monday. 

Euro zone government leaders were expected to discuss a plan announced last month and designed to help the region’s indebted countries and their struggling banking systems.

The euro plunged to a two-year low against the greenback earlier in the day, as concerns over the outlook for global growth persisted after disappointing economic reports from the U.S. and China. 

Chinese Premier Wen Jiabao said over the weekend that the country’s economy faces “relatively large” downward pressure in the near-term.

Elsewhere, the euro was trading close to a three-and-a-half year low against the pound with EUR/GBP falling 0.04%, to hit 0.7931.

In other euro negative news, data indicated that investor confidence in the euro zone for July deteriorated to the lowest level since July 2009, remaining in negative territory for the 12th consecutive month.

Sentix research group said its index of investor confidence declined to minus 29.6 in July from June’s reading of minus 28.9.