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Forex - Euro extends losses against dollar, hitting fresh 2-day low

Published 05/11/2010, 06:01 AM
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EUR/JPY
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Investing.com – The euro extended losses against the U.S. dollar on Tuesday, hitting a fresh 2-day low, as relief over a massive EU rescue plan to combat the euro zone debt crisis faded.

EUR/USD hit 1.2669 during European late morning trade, its lowest since Friday; the pair subsequently consolidated around 1.2691, shedding 0.76%.

The pair was likely to find resistance at 1.3342, the high of March 30, and support at 1.2515, Thursday's low and a 14-month low.

The central component of the European aid package, which was announced on Monday, was a promise by EU nations to back EUR 440 billion in new loans to bail out heavily Europe's indebted economies.

Investors question the wisdom of solving the region's debt crisis by taking on more debt, and doubt whether Greece will be able to carry out the harsh austerity steps needed to restructure its public finances.

Meanwhile, the euro also slumped versus the yen, with EUR/JPY dropping 1.79% to reach 117.14.

Later in the day, the U.S. Census Bureau was set to publish data on wholesale inventories, a signal of future business spending. Also Tuesday, a research group, the TechnoMetrica Institute of Policy and Politics, and a newspaper, Investor's Business Daily, were due to release a report on U.S. consumer confidence.

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