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Forex - EUR/USD hits 3-week low, punished by Greek debt woes

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Forex Pros - The euro fell to a three-week low against the U.S. dollar on Thursday, as fears that Greece is moving closer to defaulting on its debt drove the cost of insuring the country's debt to euro-lifetime highs.

EUR/USD hit 1.4090 during late Asian trade, the pair's lowest since May 26; the pair subsequently consolidated at 1.4128 shedding 0.35%.

The pair was likely to find support at 1.4001, the low of May 24 and resistance at 1.4450, Wednesday's high.

European Central Bank Vice-President Vitor Constancio said Wednesday that any debt restructuring by Greece must avoid a ratings event that would push its rating into default.

Meanwhile, as protests against austerity measures became increasingly violent in Athens, Greek Prime Minister George Papandreou announced he planned to shuffle the government, but said he wouldn't step down.

Mounting uncertainty saw the yield spread of 10-year Greek government bonds versus benchmark German Bunds surge to a euro lifetime high, while fears about contagion also drove equivalent Portuguese and Irish spreads to record levels.

The euro was also lower against the pound, with EUR/GBP slipping 0.16% to hit 0.8740.

Later in the day, the euro zone was to publish official data on consumer price inflation. Also Thursday, the U.S. was to publish a weekly report on initial jobless claims, as well as data on building permits, housing starts and manufacturing activity.

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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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