Investing.com - The euro extended losses against the U.S. dollar on Wednesday, as concerns over the economic outlook for the euro zone and higher Spanish borrowing costs weighed while diminished expectations for monetary easing buoyed the greenback.
EUR/USD hit 1.3142 during European early afternoon trade, the pair’s lowest since March 22; the pair subsequently consolidated at 1.3144, shedding 0.67%.
The pair was likely to find support at 1.3048, the low of March 16 and resistance at 1.3238, the session high.
Spain’s Treasury auctioned EUR2.59 billon of government bonds, short of the maximum targeted amount of EUR3.5 billion, in the country’s first debt auction since last week’s austerity budget. Following the auction, the yield on Spanish 10-year bonds climbed to 5.7%, up from 5.5% before the sale.
On Tuesday, Spain’s government announced that the country’s public debt will rise to a record 79.8% of gross domestic product this year.
Earlier Wednesday, data confirmed that the euro zone service sector contracted for the sixth time in seven months in March, increasing the likelihood that the economy has entered a technical recession.
The final euro zone services purchasing managers’ index was revised up to 49.2 in March, from a preliminary estimate of 48.7, but remained below the 50 level that separates contraction from expansion.
A separate report showed that euro zone retail sales fell by 0.1% in February, against expectations for a 0.1% increase and were 2.1% lower year-on-year.
Meanwhile, official data showed that German factory orders rose 0.3% in February, below expectations for a 1.2% increase, renewing concerns over the economic outlook for the bloc’s largest economy.
The greenback remained supported after Tuesday’s minutes of the Federal Reserve’s March meeting showed that policymakers will refrain from launching a third round of quantitative easing unless the rate of U.S. growth falters or inflation drops below the central bank’s 2% targeted rate.
The euro was sharply lower against the yen, with EUR/JPY dropping 1.3% to hit 108.15 and also weakened against the pound, with EUR/GBP shedding 0.37% to hit 0.8284.
Later in the day, the European Central Bank was to announce its benchmark interest rate.
Meanwhile, the U.S. was to publish a report non-farm employment change, as well as data from the Institute of Supply Management on service sector growth. In addition, U.S. Treasury Secretary Timothy Geithner was due to speak.
EUR/USD hit 1.3142 during European early afternoon trade, the pair’s lowest since March 22; the pair subsequently consolidated at 1.3144, shedding 0.67%.
The pair was likely to find support at 1.3048, the low of March 16 and resistance at 1.3238, the session high.
Spain’s Treasury auctioned EUR2.59 billon of government bonds, short of the maximum targeted amount of EUR3.5 billion, in the country’s first debt auction since last week’s austerity budget. Following the auction, the yield on Spanish 10-year bonds climbed to 5.7%, up from 5.5% before the sale.
On Tuesday, Spain’s government announced that the country’s public debt will rise to a record 79.8% of gross domestic product this year.
Earlier Wednesday, data confirmed that the euro zone service sector contracted for the sixth time in seven months in March, increasing the likelihood that the economy has entered a technical recession.
The final euro zone services purchasing managers’ index was revised up to 49.2 in March, from a preliminary estimate of 48.7, but remained below the 50 level that separates contraction from expansion.
A separate report showed that euro zone retail sales fell by 0.1% in February, against expectations for a 0.1% increase and were 2.1% lower year-on-year.
Meanwhile, official data showed that German factory orders rose 0.3% in February, below expectations for a 1.2% increase, renewing concerns over the economic outlook for the bloc’s largest economy.
The greenback remained supported after Tuesday’s minutes of the Federal Reserve’s March meeting showed that policymakers will refrain from launching a third round of quantitative easing unless the rate of U.S. growth falters or inflation drops below the central bank’s 2% targeted rate.
The euro was sharply lower against the yen, with EUR/JPY dropping 1.3% to hit 108.15 and also weakened against the pound, with EUR/GBP shedding 0.37% to hit 0.8284.
Later in the day, the European Central Bank was to announce its benchmark interest rate.
Meanwhile, the U.S. was to publish a report non-farm employment change, as well as data from the Institute of Supply Management on service sector growth. In addition, U.S. Treasury Secretary Timothy Geithner was due to speak.