Forexpros – The euro was little changed against the U.S. dollar on Tuesday, as ongoing concerns over Spain’s bank bailout and uncertainty over the outcome of this weekend’s Greek elections weighed on the single currency.
EUR/USD hit during late Asian trade, the pair’s lowest since Friday; the pair subsequently consolidated at 1.2490, edging up 0.07%.
The pair was likely to find support at 1.2409, the low of May 6 and resistance at 1.2573, Friday’s high.
The euro came under renewed pressure after Spain announced that it is to borrow as much as EUR100 billion in order to recapitalize its banks, as details of the bailout agreement remained unclear.
The exact amount Madrid is to receive will only be decided later this month, after the results of independent banking audits are published. In addition, questions remained over the source of the funds and whether the bailout repayments would add to the country’s already high borrowing costs.
Investors also remained on edge ahead of Sunday’s general election in Greece, amid fears that that the election of anti-bailout parties to government could precipitate an exit from the euro area.
The euro was slightly higher against the pound and the yen, with EUR/GBP adding 0.12% to hit 0.8069 and EUR/JPY rising 0.22% to hit 99.38.
The yen weakened earlier after the International Monetary Fund said the yen was “moderately overvalued,” and indicated that it supported Japan’s view on yen weakening interventions, given current market conditions.
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