Forexpros – The euro extended losses against the U.S. dollar on Monday, falling to a fresh session low after Italian bond yields spiked to a euro-era high at the first auction of the country’s debt since Silvio Berlusconi resigned as prime minister.
EUR/USD hit 1.3662 during European late morning trade, the session low; the pair subsequently consolidated at 1.3660, falling 0.64%.
The pair was likely to find support at 1.3577, last Friday’s low and resistance at 1.3809, the days high.
Italy’s Treasury raised the maximum targeted amount of EUR3 billion at the sale, but yields on the five-year bonds rose to a euro-era high of 6.29%, up from 5.32% at a similar auction a month ago.
Last week, the yield on Italian 10-year bonds climbed above the 7% threshold which precipitated bailouts in Greece, Ireland and Portugal, before falling back.
Over the weekend, Italy’s President Giorgio Napolitano appointed former European Commissioner Mario Monti to head a new government as the country attempts to implement austerity measures while simultaneously shoring up economic growth.
Earlier Monday, official data showed that industrial output in the euro zone fell at the fastest pace in two-and-a-half years in September, dropping 2%, slightly less than expectations for a 2.2% decline, but erasing all of the previous month’s 1.4% gain.
The weak data underlined concerns over the threat of an economic downturn in the single currency bloc.
Meanwhile, the euro was slightly higher against the pound, with EUR/GBP up 0.17% to trade at 0.8574.
Also Monday, Greece’s finance minister said his priority was to ensure the country receives its sixth tranche of bailout funds after Prime Minister Lucas Papademos was sworn in over the weekend.
Forexpros
