Investing.com - The euro remained lower against the U.S. dollar in cautious trade on Wednesday, as concerns over the debt crisis in the euro zone dominated market sentiment ahead of a key auction on Spanish government debt on Thursday.
EUR/USD hit 1.3059 during U.S. morning trade, the pair’s lowest since Monday; the pair subsequently consolidated at 1.3094, shedding 0.24%.
The pair was likely to find support at 1.2994, Monday’s low and a two-month low and resistance at 1.3140, the session high.
The euro weakened broadly ahead of a critical auction of two and 10-year Spanish government bonds on Thursday, amid uncertainty over whether the government will be able to reduce one of the euro zone’s largest budget deficits in the face of a looming recession.
Market sentiment was boosted on Tuesday after an auction of short-term Spanish government debt raised the full targeted amount of EUR3 billion, but the country’s borrowing costs almost doubled.
Meanwhile, concerns over Spain’s troubled banking sector mounted after the country’s central bank reported that the amount of bad loans at domestic banks rose to an 18-year high in February.
Elsewhere, concerns over Portugal’s economic health intensified after Prime Minister Pedro Passos Coelho said Wednesday there were "no guarantees" that the country would meet its commitment to return to the international capital markets before September 2013.
The euro was hovering close to a 19-month low against the stronger pound, with EUR/GBP tumbling 0.77% to hit 0.8180 but held gains against the softer yen, with EUR/JPY up 0.24% to hit 106.35.
Earlier in the day, German auctioned EUR4.21 billion of two-year government bonds at a record low yield of 0.14%, as investor demand for safe haven assets remained well supported.
EUR/USD hit 1.3059 during U.S. morning trade, the pair’s lowest since Monday; the pair subsequently consolidated at 1.3094, shedding 0.24%.
The pair was likely to find support at 1.2994, Monday’s low and a two-month low and resistance at 1.3140, the session high.
The euro weakened broadly ahead of a critical auction of two and 10-year Spanish government bonds on Thursday, amid uncertainty over whether the government will be able to reduce one of the euro zone’s largest budget deficits in the face of a looming recession.
Market sentiment was boosted on Tuesday after an auction of short-term Spanish government debt raised the full targeted amount of EUR3 billion, but the country’s borrowing costs almost doubled.
Meanwhile, concerns over Spain’s troubled banking sector mounted after the country’s central bank reported that the amount of bad loans at domestic banks rose to an 18-year high in February.
Elsewhere, concerns over Portugal’s economic health intensified after Prime Minister Pedro Passos Coelho said Wednesday there were "no guarantees" that the country would meet its commitment to return to the international capital markets before September 2013.
The euro was hovering close to a 19-month low against the stronger pound, with EUR/GBP tumbling 0.77% to hit 0.8180 but held gains against the softer yen, with EUR/JPY up 0.24% to hit 106.35.
Earlier in the day, German auctioned EUR4.21 billion of two-year government bonds at a record low yield of 0.14%, as investor demand for safe haven assets remained well supported.