Forexpros – The euro remained sharply lower against the U.S. dollar on Wednesday, trading at a six-week low after weak investor demand at a German bond auction added to fears that the euro zone debt crisis is spreading to core economies.
EUR/USD hit 1.3361 during U.S. morning trade, the pair’s lowest since October 6; the pair subsequently consolidated at 1.3369, tumbling 1%.
The pair was likely to find support at 1.3259, the low of October 5 and resistance at 1.3530, the days high.
The euro weakened broadly after Germany’s Treasury auctioned just EUR3.64 billion of 10-year government bonds with the average yield set at 1.98% earlier. Total bids for German debt fell short of the maximum amount available by 35%, the worst demand on record.
The auction came after preliminary data showed that the euro zone manufacturing purchasing managers’ index slumped to the lowest level since July 2009 in November.
A separate report showed that industrial orders in the euro zone fell significantly more-than-expected in September.
Earlier Wednesday, sentiment on the single currency was hit following reports saying that Belgium and France were in fresh talks over an existing rescue deal for troubled lender Dexia, sparking concerns that France would have to take a larger part in the bailout, which could have implications for the country’s AAA credit rating.
In the U.S., official data showed that new orders for long-lasting manufactured goods unexpectedly rose in October, but the previous month’s number was revised down sharply.
The Commerce Department said durable goods orders, excluding transportation, rose 0.7% after a downwardly revised 0.6% increase in September. Analysts had expected the number to remain unchanged from the previously reported 1.8% increase.
Overall orders fell 0.7% after declining 1.5% in September.
In a separate report, the Labor Department said number of people who filed for unemployment assistance in the U.S. last week rose unexpectedly, climbing to a seasonally adjusted 393,000, confounding expectations for a decline to 390,000.
The euro was also down against the pound, with EUR/GBP shedding 0.42% to hit 0.8601.
Also Wednesday, U.S. data showed that consumer spending edged up 0.1% in October, slowing sharply from a revised 0.7% increase the previous month.
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