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Forex - EUR/USD extends losses on EU EFSF comments

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Forexpros - The euro extended losses against the U.S. dollar on Tuesday, dropping to a fresh daily low after the European Commission said the region's bailout fund was big enough for the time being.

EUR/USD hit 1.4357 during early European afternoon trade, the daily low; the pair subsequently consolidated at 1.4370, dropping 0.51%.

The pair was likely to find support at 1.4149, the low of August 12 and short-term resistance at 1.4476, Monday's high and a three-week high.

The European Commission said earlier that the European Financial Stability Facility was big enough "for the time being" to assist indebted euro zone nations in need of financial aid.

European Commission spokesman Olivier Bailly added that the size of the fund would be reassessed "if there would be a need for more support."

The comments come ahead of a meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy in Paris later in the day to address the region's sovereign debt crisis.

On Monday, German government spokesman Steffen Seibert said the introduction of euro bonds will not be on the agenda when the two leaders meet, while adding that the German government did not expect a major breakthrough.

Earlier in the day, data showed that German economic growth nearly stalled during the second quarter, increasing by a seasonally adjusted 0.1%, below expectations for a 0.5% increase.

A separate report said that the euro zone's gross domestic product increased by a seasonally adjusted 0.2% during the second quarter, slowing from growth of 0.8% in the preceding quarter and below expectations for a 0.3% gain.

It was the worst GDP reading since the euro zone emerged from a recession in late 2009.

Elsewhere, the euro was also down against the pound, with EUR/GBP shedding 0.4% to hit 0.8776.

Later in the day, the U.S. was to produce official data on building permits and housing starts, as well as reports on import prices, the capacity utilization rate and industrial production.

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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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