Forexpros – The euro was broadly lower against its major counterparts on Monday, as concerns over Greece’s political turmoil and a potential Greek exit from the euro zone continued to weigh on demand for the single currency.
During European late morning trade, the euro was lower against the U.S. dollar, with EUR/USD falling 0.39% to hit 1.2867.
On Sunday, Alexis Tsipras, the head of Greece’s largest anti-bailout party Syriza, rejected calls to join a coalition government, fuelling fears that a fresh round of elections is becoming inevitable and casting the country’s ability to uphold its fiscal commitments into doubt.
Meanwhile, Spanish and Italian government bond auctions saw borrowing costs rise.
Spain sold EUR2.9 billion of 12 and 18-month bonds, slightly below its maximum target of EUR3 billion. The yield on the 12-month bonds rose to 2.98%, from 2.62% previously, while the yield on the 18-month bonds increased to 3.3%, from 3.11%.
In Italy, the Treasury raised a total of EUR5.25 billion euros, meeting the top of a planned issue range of EUR3.50-5.25 billion euros, at an average 3.91% yield, the highest since January but below market levels of around 4% at the time of the auction.
Adding to the bearish sentiment, official data showed that industrial production in the euro zone fell unexpectedly in March, adding to fears over the health of the region’s economy.
Eurostat, the European statistics agency said industrial production dipped by a seasonally adjusted 0.3% in March, defying expectations for a 0.4% increase.
The single currency was also lower against the pound, trading within striking distance of a three-and-a-half year low, with EUR/GBP shedding 0.36% to hit 0.8009.
The euro was lower against the yen, with EUR/JPY declining 0.27% to hit 102.98, and remained little changed against the Swiss franc EUR/CHF inching 0.01% lower to hit 1.2010.
In Switzerland, official data showed that producer prices dipped 0.1% in April, declining for the first time in five months and defying expectations for a 0.3% increase.
Elsewhere, the shared currency was steady against the Canadian dollar and higher against the Australian and New Zealand dollars, with EUR/CAD edging up 0.01% to hit 1.2926, EUR/AUD adding 0.07% to hit 1.2899 and EUR/NZD rising 0.32% to hit 1.6553.
Earlier in the day, official data showed that home loans in Australia rose unexpectedly in March, adding 0.3% after a 2.5% decline the previous month.
Analysts had expected home loans to fall 1.8% in March.
Meanwhile, official data showed that New Zealand retail sales fell 1.5%, more than expectations for a 0.7% decline and following a 1.8% rise in the fourth quarter.
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