Forex – EUR/USD edges up in early Asian trade

Forexpros – The euro moved higher against the U.S. dollar in Asian trade Tuesday, as a self-imposed deadline by European leaders to formulate a solution to the region’s debt crisis appeared unlikely to produce a permanent solution.

EUR/USD hit 1.3750 in early Asian trade, the pair’s highest since; the pair subsequently consolidated at 1.3745, easing up 0.06%.

The pair was likely to find support at 1.3583, last Wednesday’s low, and resistance at 1.3914, Monday’s high.

On Monday, German Chancellor Angela Merkel’s spokesman Steffen Seibert dashed market hopes for an imminent solution to Europe’s two-year old debt crisis, saying Merkel had made it clear that, “dreams are taking hold now with this package, everything will be solved and everything will be over on Monday won’t be fulfilled.”

The process for an end to the crisis, “surely extends well into next year,” Seibert said at a news briefing from Berlin.

Over the weekend, the Group of 20 finance ministers and central bankers wrapped up talks in Paris, proposing a scheme to ward off Greek default, strengthen regional financial institutions and halt the spread of debt contagion.

European officials set an October 23 deadline for action at their scheduled meeting in Brussels, Belgium.

Stocks in Europe ended the day lower, as France’s CAC dropped 1.61% to 3,166.06, Britain’s FTSE 100 surrendered 0.54% to 5,436.70, and Germany’s DAX declined 1.81% to close the session at 5,859.43.

Earlier in the day, the U.S. Federal Reserve reported that industrial production rose by a seasonally adjusted 0.2% in September, up from 0.0% in August and in line with market expectations.

On Wall Street, shares suffered from Merkel’s assessment of European debt, with the Dow Jones Industrial Average falling 2.13% to 11,397.00, the Nasdaq Composite Index lost 1.98% to 2,614.92 and the S&P 500 shed 1.94% to end the day at 1,200.86.

Meanwhile, the euro was marginally higher against the British pound and the Japanese yen, with EUR/GBP up 0.05% to hit 0.8729, and EUR/JPY higher by 0.04% to hit 105.57.

The ZEW’s Economic Sentiment survey on the business outlook for Germany and the euro zone was due out later Tuesday.