Investing.com – The euro erased losses against the U.S. dollar on Tuesday, after falling earlier when the European Central Bank failed to attract enough deposits from banks to neutralize its purchases of bonds from debt-ridden euro zone countries.
EUR/USD pulled away from 1.3286, the daily low, to hit 1.3330 during U.S. morning trade, easing up 0.08%.
The pair was likely to find support at 1.3272, Monday’s low and resistance at 1.3530, the high of November 23.
The ECB attracted EUR194 billion in seven-day bank deposits, falling short of the EUR203 billion needed to offset its bond purchases. According to market participants, the shortfall was the first since May.
The single currency remained supported after Italy auctioned the maximum targeted amount of EUR7.5 billion of debt earlier in the day, but the country’s borrowing costs surged to euro-era highs.
The yield on the three-year bond was a record 7.89% and 10-year yields climbed to 7.56% from 6.06% at a similar auction last month.
Meanwhile, euro zone finance ministers were meeting in Brussels and Italy’s near unsustainable borrowing costs looked likely to be on the agenda.
In addition, the ministers were expected to approve plans to enlarge the scope of the region’s bailout fund and to sign off on Greece’s next tranche of financial aid.
Elsewhere, the euro was lower against the pound, with EUR/GBP shedding 0.65% to hit 0.8529.
In the U.K. earlier Chancellor George Osborne said the economy was now expected to grow 0.7% in 2012, down from a March budget forecast of 2.5% growth.
Osborne also said borrowing will fall much less than expected, meaning that harsh austerity measures will last beyond 2015.
In the U.S., the Conference Board said consumer confidence soared in November, rising to the highest level since July, but overall readings remained historically weak.
A separate report showed that U.S. house prices fell for the 15th consecutive month in September, falling at an annualized rate of 3.6%, outstripping expectations for a 3% decline.
EUR/USD pulled away from 1.3286, the daily low, to hit 1.3330 during U.S. morning trade, easing up 0.08%.
The pair was likely to find support at 1.3272, Monday’s low and resistance at 1.3530, the high of November 23.
The ECB attracted EUR194 billion in seven-day bank deposits, falling short of the EUR203 billion needed to offset its bond purchases. According to market participants, the shortfall was the first since May.
The single currency remained supported after Italy auctioned the maximum targeted amount of EUR7.5 billion of debt earlier in the day, but the country’s borrowing costs surged to euro-era highs.
The yield on the three-year bond was a record 7.89% and 10-year yields climbed to 7.56% from 6.06% at a similar auction last month.
Meanwhile, euro zone finance ministers were meeting in Brussels and Italy’s near unsustainable borrowing costs looked likely to be on the agenda.
In addition, the ministers were expected to approve plans to enlarge the scope of the region’s bailout fund and to sign off on Greece’s next tranche of financial aid.
Elsewhere, the euro was lower against the pound, with EUR/GBP shedding 0.65% to hit 0.8529.
In the U.K. earlier Chancellor George Osborne said the economy was now expected to grow 0.7% in 2012, down from a March budget forecast of 2.5% growth.
Osborne also said borrowing will fall much less than expected, meaning that harsh austerity measures will last beyond 2015.
In the U.S., the Conference Board said consumer confidence soared in November, rising to the highest level since July, but overall readings remained historically weak.
A separate report showed that U.S. house prices fell for the 15th consecutive month in September, falling at an annualized rate of 3.6%, outstripping expectations for a 3% decline.