We have updated our privacy policy and terms & conditions. Find out more here.
0
 

Forex - EUR/USD finds support but remains vulnerable

By Investing.com  |  Forex  |  May 16, 2012 11:47AM GMT  |   Add a Comment
 
AA
+
-
Investing.com - The euro firmed up against the U.S. dollar on Wednesday, pulling back from a four-month low but the single currency remained vulnerable as fears over the risk of a Greek exit from the euro zone supported safe haven demand.

Forex - EUR/USD finds support but remains vulnerable
EUR/USD retreated from 1.2680, the pair’s lowest since January 17, to hit 1.2720 during European early afternoon trade, still down 0.07% on the day.

The pair was likely to find support at 1.2648, the low of January 18 and resistance at 1.2740, the session high.

The euro found some support after tumbling to a four-month low against the U.S. dollar earlier, after talks in Greece aimed at forming a government failed, forcing another round of elections in June.

Uncertainty over the outcome of the new elections fuelled fears over Greece’s ability to uphold its financial commitments and its possible exit from the euro zone.

Peripheral bond yields eased as market sentiment improved, with the yield on Spanish 10-year bonds easing back to 6.3% from 6.41%, while the yield on Italian 10-year bonds pulled back to 5.98% after rising above 6% earlier.

Meanwhile, a report showed that consumer price inflation in the euro zone held steady at 2.6% in April, unchanged from a preliminary estimate. Month-on-month, CPI rose 0.5%, in line with expectations, after rising by 1.3% in March.

The euro pulled back from a three-and-a-half year low against the pound, with EUR/GBP up 0.30% to hit 0.7983.

The pound weakened broadly after the Bank of England’s quarterly inflation report said inflation will not fall back as quickly as hoped and was likely to remain above its 2% targeted rate for at least another year.

The BoE also revised down economic growth forecasts, with policymakers now expecting an annual rate of growth of approximately 2.6% in two years' time, compared with February's forecast of 3%.

BoE Governor Mervyn King said that sovereign debt crisis in the euro zone posed the single biggest threat to the U.K. economic recovery.

Later Wednesday, the U.S. was to produce official data on building permits and housing starts, followed by reports on the capacity utilization rate and industrial production. In addition, the Federal Reserve was to publish the minutes of its most recent policy meeting.


Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data .

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Related Articles

Add a Comment

 

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

EUR/GBP
 
 
 
Are you sure you want to delete this chart?
 
 
 
Are you sure you want to delete this chart?
 
 
 

Successfully Reported

Thank you. This comment has been flagged for a moderator.
_touchLoadingMsg