Forexpros – The euro fell against the dollar on Friday on growing talk Spain will seek financial assistance in the coming days.
In U.S. trading on Friday, EUR/USD was trading down 0.65% at 1.2479, up from a session low of 1.2436, and off from a high of 1.2575.
The pair was likely to test support at 1.2386, the low of June 4, and resistance at 1.2586, the high of June 6.
Growing talk that Spain will ask its eurozone neighbors for help recapitalizing its banks pushed the euro down on Friday.
Reports that Spain will ask for financial assistance came in wake of a move by Fitch Ratings to slash Spanish debt down three notches to BBB from A.
Lackluster data out of Europe’s largest economy softened the euro as well.
In Germany, exports fell 1.7% in April, outpacing analyst’s expectations of a 0.7% decline, which reflects weak demand for products made in Europe’s economic engine.
In Italy, industrial output in April contracted 1.9% from a revised 0.6% gain in March, far outpacing expectations for a contraction of 0.5%.
Industrial production dropped by an annual rate of 9.2% further fueling fears the European economy is battling major headwinds thanks to the debt crisis.
In the U.S., the Commerce Department reported the country’s trade deficit narrowed 4.9% in April to USD50.1 billion compared with market forecasts for USD49.5 billion.
Cooling economies in Europe and Asia coupled with a stronger dollar cut into exports.
Imports into the U.S. dropped as well.
The euro, meanwhile, was up slightly against the pound and down against the yen, with EUR/GBP up 0.01% at 0.8089 and EUR/JPY trading down 0.87% at 99.15.
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