Forexpros –
Forexpros – The euro traded lower against the U.S. dollar Tuesday, in a tight post holiday range, as traders worried over the Spanish economy and potential worldwide global economic slowing due to weak NFP numbers on Friday.
EUR/USD hit 1.3060 during U.S. morning trade, the session low; the pair subsequently consolidated at 1.3078, giving back 0.21%.
The pair was likely to find support at 1.3032, Monday’s low and a near one-month low and short-term resistance at 1.3163, the high of April 5.
The single currency fell as high Spanish borrowing costs mounted. The yield on Spain’s 10-year government bonds moved up to 5.9% from 5.8% earlier in the day sparking fears that the country will be the next in the euro zone to require a bailout.
The increase in borrowing costs came despite reassurances from Spanish Prime Minister Mariano Rajoy earlier that the country will cut its budget deficit to 3% of gross domestic product in 2013.
Sentiment on the euro was also hit after a report showed that investor sentiment in the euro zone dropped this month, after three successive monthly increases.
Market research group, Sentix said its index of investor confidence declined by 6.5 points to minus 14.7 in April from March’s reading of minus 8.2.
Analysts had expected the index to improve modestly by 0.1 points to minus 8.1 in April.
Meanwhile, the outlook for the U.S. recovery remained clouded after government data on Friday showed that the economy added just 120,000 jobs in March, the lowest number since December and well below expectations for a 203,000 increase.
The euro traded higher against the pound, with EUR/GBP gaining 0.15% to 0.8260 but declined against the yen, with EUR/JPY dropping 0.85% to hit 105.89.
In euro positive news Tuesday, official data indicated French industrial production climbed by 0.3% in February, slightly more than expectations for a 0.2% increase, easing concerns over the economic outlook for the euro zone’s second largest economy.
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