Forexpros – The euro was sharply lower against the U.S. dollar on Tuesday, after Standard & Poor’s downgraded Italy’s sovereign debt rating, while uncertainty over whether Greece will receive its next trance of aid also weighed.
EUR/USD hit 1.3594 during late Asian trade, the daily low; the pair subsequently consolidated at 1.3613, shedding 0.53%.
The pair was likely to find support at 1.3493, the low of September 12 and a seven-month low and resistance at 1.3720, Monday’s high.
S&P downgraded its debt rating on Italy to A from A+, citing weak economic growth and growing political problems, adding that it maintained a negative outlook.
Meanwhile, talks between the European Union, the International Monetary Fund and the European Central Bank to discuss whether Greece has done enough to qualify for additional financial assistance ended Monday without reaching an agreement.
Greece’s Finance Minister Evangelos Venizelos said the talks were “substantive” and would continue late on Tuesday but he added some work still needed to be done.
The euro was also lower against the pound, with EUR/GBP shedding 0.36% to hit 0.8682.
Later in the day, the ZEW Centre for Economic Research was to release reports on economic sentiment in Germany and the wider single currency bloc, while the U.S. was to publish government data on building permits and housing starts.
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