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Forex - EUR/USD dips as doubts build on ECB intervention

Published 08/06/2012, 08:46 PM
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Investing.com - The euro dipped in Asian trading on Tuesday as doubts began to build the European Central Bank will rush to roll out a bond purchasing program to lower borrowing costs in Spain and Italy despite German approval for the program.

In Asian trading on Tuesday, EUR/USD was trading down 0.10% at 1.2389, up from a low of 1.2388 and off from a high of 1.2392.

The pair was likely to find support at 1.2342, the low from Aug. 6, and resistance at 1.2429, the high from Aug. 6.

The euro gained in earlier U.S. and European sessions on sentiment that the European Central Bank will resume buying sovereign debt from countries like Spain in the open market to lower borrowing costs there.

However, the dollar regained its strength against the single currency as investors traded on sentiment that details surrounding such policies must first be ironed out.

Yields rose in Spain earlier, with the yield on the country's benchmark 10-year note pushing close to the 7% threshold widely seen as unsustainable by investors and indicative of a country in need of a bailout.

Meanwhile the dollar firmed as investors took a break from guessing if and when the Federal Reserve will jolt the U.S. economy with monetary stimulus tools.

The euro, meanwhile, was largely flat against the pound and down against the yen, with EUR/GBP up 0.01% at 0.7949, and EUR/JPY trading down 0.16% at 96.87.

Later Tuesday, Italy will release official data on its second quarter gross domestic product.

Germany, meanwhile, will release data on factory orders, a leading indicator of production.

Later Tuesday, Fed Chairman Ben Bernanke is to speak at an event in Washington, D.C.










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