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Forex - EUR/USD in tight range as euro zone debt worries weigh

Published 05/19/2011, 10:14 AM
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Investing.com – The euro was trading in a tight range against the U.S. dollar on Thursday, swinging between small gains and losses as unresolved concerns over euro zone sovereign debt issued weighed.

EUR/USD hit 1.4306 during early U.S. trade, the daily high; the pair subsequently consolidated at 1.4269, easing up 0.14%.

The pair was likely to find support at 1.4119, the low of July 17 and resistance at 1.4422, the high of May 11.

The single currency came under pressure after a report quoted European Central Bank head Jean-Claude Trichet as saying the bank would be unable to accept Greece's government bonds as collateral in the event of a restructuring of its debt.

Another ECB official, Juergen Stark said a restructuring of Greek debt would make it impossible for the ECB to continue to accept its bonds as collateral in liquidity operations.

Elsewhere, the U.S. Labor Department said initial unemployment claims decreased by 29,000 to a seasonally adjusted 409,000 in the week ended May 14. The prior week's figure was revised to 438,000 from an originally reported 434,000.

Analysts had expected claims would fall to 420,000 last week.

The euro was also slightly higher against the pound, with EUR/GBP easing up 0.17% to hit 0.8828.

Also Thursday, official data showed that the Philadelphia Fed manufacturing index declined sharply this month while industry data showed that U.S. existing home sales fell unexpectedly in April.


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