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Forex - EUR/USD extends losses on debt vote uncertainty

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Forexpros - The euro extended losses against the U.S. dollar on Monday, falling to a fresh daily low amid uncertainty ahead of a vote to raise the U.S. debt ceiling and after data showed that U.S. manufacturing activity declined sharply last month.

EUR/USD hit 1.4260 during U.S. morning trade, the daily low; the pair subsequently consolidated at 1.4283, dropping 0.79%.

The pair was likely to find support at 1.4138, the low of July 21 and resistance at 1.4453, the days high.

The euro weakened as investors remained worried about whether U.S. lawmakers would approve a plan to raise the USD14.3 trillion federal debt ceiling and avoid a default.

Meanwhile, concerns that the deal would not be sufficient to prevent ratings agencies from cutting the U.S. sovereign debt rating also weighed.

Market sentiment was also hit after the Institute for Supply Management said its index of purchasing managers fell to 50.9 in July, compared to June's reading of 55.3. Analysts had expected the ISM PMI to decline to 54.8 in July.

On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.

The data added to concerns about the outlook for global economic growth after a report earlier showed that Chinese factory activity slowed in July, while a separate report showed that manufacturing in the euro zone slowed to a near standstill last month.

The Markit final euro-zone manufacturing purchasing managers' index fell to 50.4 in July from 52 in June, its lowest level in almost two years.

The euro was almost unchanged against the pound, with EUR/GBP inching up 0.01% to hit 0.8766.

Also Monday, official data showed that the euro zone's unemployment rate remained unchanged at 9.9% in June, holding steady for the fourth consecutive month.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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