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Forex - EUR/USD tumbles to 81/2 month low on Greece fears

Published 10/03/2011, 11:42 AM
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Investing.com – The euro extended losses against the U.S. dollar on Monday, tumbling to an eight-and-a-half month low as better-than-expected U.S. manufacturing data failed to overshadow concerns over a possible debt default by Greece.

EUR/USD hit 1.3239 during U.S. morning trade, the pair’s lowest since January 13; the pair subsequently consolidated at 1.3260, tumbling 0.94%.

The pair was likely to find support at 1.3088, the low of January 13 and resistance at 1.3380, the days high.

Earlier in the day, the Institute of Supply Management said its manufacturing purchasing managers’ index rose to 51.6 from 50.6 in August, as production and hiring increased.

Analysts had expected the index to tick down to 50.5 in September.

The euro remained under broad selling pressure as concerns over the potential impact of a Greek default on Europe’s already fragile banking sector mounted.

Greek Finance Minister Evangelos Venizelos said earlier that his country has taken all measures necessary to meet its obligations next year after the government presented its 2012 budget to parliament.

Athens says it needs to receive its next EUR8 billion tranche of aid by mid-October, in order to avert a default.

The euro was also lower against the pound, with EUR/GBP shedding 0.22% to hit 0.8570.

Meanwhile, euro zone finance ministers were meeting in Brussels to discuss options for increasing the capacity of the region’s bailout fund, the European Financial Stability Facility.

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