Forexpros – The euro remained lower against the U.S. dollar on Wednesday, as sentiment on the single currency soured amid doubts over the outcome of this week’s critical European Union summit.
EUR/USD hit 1.3352 during U.S. morning trade, the daily low; the pair subsequently consolidated at 1.3374, shedding 0.20%.
The pair was likely to find support at 1.3258, the low of November 30 and resistance at 1.3520, the high of December 1.
The euro gave up early gains after the Wall Street Journal reported that an unnamed senior German official expressed pessimism on the prospect of success at the two-day EU summit, scheduled to begin Thursday.
European leaders are to discuss proposed changes to EU treaties which would allow for greater fiscal integration and stricter enforcement of budgetary discipline in the single currency bloc, clearing the way for the European Central Bank to play a bigger role in stabilizing euro zone bond markets.
European officials were also reported to be negotiating an increase in the bloc’s bailout fund, the European Financial Stability Facility and the permanent structure that will replace it, the European Stability Mechanism.
The single currency found some support from speculation that the European Central Bank may cut interest rates by 0.25% to 1% at its policy-setting meeting on Thursday.
Earlier in the day, official data showed that German industrial production rose 0.8% in October, beating expectations for a 0.3% increase. However, the country’s economy ministry said it expects production to remain muted in the months ahead.
Meanwhile, the euro fell sharply against the pound, with EUR/GBP tumbling 0.82% to hit 0.8520.
Also Wednesday, U.S. Treasury Secretary Timothy Geithner said the International Monetary Fund has a key role to play in resolving the euro zone’s debt crisis, but dismissed speculation that the Federal Reserve would lend money to the institution.
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