Forex - EUR/USD lower on Greek credit event fears, payroll anticipation

Investing.com - The euro traded lower against the U.S. dollar Friday, as the Greek debt swap triggered an option to force investors to participate in the deal, dampening demand for the single currency, in addition the U.S. dollar was strengthened on anticipation of a strong non farm payroll figure later in the session.

EUR/USD traded at 1.3219, down 0.41%, after hitting a high of 1.3278 and a low of 1.3213 during the session.

The pair was likely to find support at 1.3095, Wednesday’s low and a three-week low and resistance at 1.3331, the high of March 2.

Greece revealed that 95.7% of bondholders cooperated in its debt swap deal, but only after it used an option to force participation.

Holders tendered EUR152 billion of Greek law bonds representing 85.8% in response to the offer to swap their holdings.

The International Swap and Derivative Association determination committee will meet at 1 p.m. London time to determine if a credit event has occurred in Greece.

In addition, euro zone finance ministers will meet at the same time to clarify if the swap was successful enough to warrant the EUR130 billion rescue package for the island nation.

Anticipation is running high for the non farm payroll figure released later in the session. Economists are expecting that the world’s largest economy added 210,000 jobs in February.

If the forecasts are met or beat, speculation is that the Federal Reserve will be less likely to start a third round of quantitative easing to put a ceiling on borrowing costs.

Yesterday, the European Central Bank left its benchmark interest rate unchanged at 1% for the third consecutive month. 

Speaking at the bank’s post policy meeting press conference, ECB President Mario Draghi said that the bank’s recent liquidity boosting operation was an "unquestionable success”.

Draghi also said the bank had revised down the growth estimate for the euro zone to a range of between minus 0.5% and 0.3% in 2012 and warned that the economic outlook was still subject to “downside risks."

The euro fell against the pound and the yen, with EUR/GBP down 0.25% to hit 0.835 and EUR/JPY slipping 0.05% to trade at 108.22.