Investing.com - The euro slipped lower against the U.S. dollar on Wednesday, following weak economic data out of Germany, but persistent hopes for action by the European Central Bank action to stem the debt crisis in the euro zone supported the single currency.
EUR/USD hit 1.2327 during U.S. morning trade, the pair’s lowest since August 3; the pair subsequently consolidated at 1.2345, shedding 0.43%.
The pair was likely to find support at 1.2248, the low of July 31 and resistance at 1.2401, the session high.
The euro turned broadly lower after weaker-than-expected German economic indicated that the effects of the long running debt crisis are continuing to take a toll on the region’s largest economy.
German industrial production fell 0.9% in June, more than forecasts for a decline 0.8%, following an upwardly revised 1.7% gain in May.
The data came one day after a report showing that German factory orders tumbled 1.7% in June, almost twice as much as expectations for a 1.0% decline.
Meanwhile, ratings agency Standard and Poor’s revised the outlook for Greece to negative, from stable overnight and warned that Athens was likely to miss the financial targets set by its international lenders, which would increase the likelihood of a default.
But market sentiment continued to be supported by expectations that the ECB will soon take steps to help lower Spanish and Italian borrowing costs after the bank indicated last week that it may restart its bond buying program.
The euro was also lower against the pound, with EUR/GBP dropping 0.56% to 0.7892 after Bank of England Governor Mervyn King struck a less dovish tone than anticipated at his presentation of the central bank's quarterly inflation report.
The pound found support after Governor King indicated that a rate cut was unlikely in the coming months, saying it would damage some financial institutions and could be more counterproductive than beneficial.
The BoE cut its forecasts for economic growth, saying the rate of growth in two years time was likely to be around 2% per year, significantly lower than its May forecast for growth of around 2.67%.
The bank said inflation would be just below 1.7% in two years, with broadly balanced risks of it being above or below 2%.
EUR/USD hit 1.2327 during U.S. morning trade, the pair’s lowest since August 3; the pair subsequently consolidated at 1.2345, shedding 0.43%.
The pair was likely to find support at 1.2248, the low of July 31 and resistance at 1.2401, the session high.
The euro turned broadly lower after weaker-than-expected German economic indicated that the effects of the long running debt crisis are continuing to take a toll on the region’s largest economy.
German industrial production fell 0.9% in June, more than forecasts for a decline 0.8%, following an upwardly revised 1.7% gain in May.
The data came one day after a report showing that German factory orders tumbled 1.7% in June, almost twice as much as expectations for a 1.0% decline.
Meanwhile, ratings agency Standard and Poor’s revised the outlook for Greece to negative, from stable overnight and warned that Athens was likely to miss the financial targets set by its international lenders, which would increase the likelihood of a default.
But market sentiment continued to be supported by expectations that the ECB will soon take steps to help lower Spanish and Italian borrowing costs after the bank indicated last week that it may restart its bond buying program.
The euro was also lower against the pound, with EUR/GBP dropping 0.56% to 0.7892 after Bank of England Governor Mervyn King struck a less dovish tone than anticipated at his presentation of the central bank's quarterly inflation report.
The pound found support after Governor King indicated that a rate cut was unlikely in the coming months, saying it would damage some financial institutions and could be more counterproductive than beneficial.
The BoE cut its forecasts for economic growth, saying the rate of growth in two years time was likely to be around 2% per year, significantly lower than its May forecast for growth of around 2.67%.
The bank said inflation would be just below 1.7% in two years, with broadly balanced risks of it being above or below 2%.