Forexpros – The beleaguered euro remained close to a seven-month trough against the U.S. dollar on Monday, as concerns over a debt default by Greece mounted, while major French lenders prepared for possible downgrades.
EUR/USD hit 1.3500 during European early afternoon trade, the pair’s lowest since February 16; the pair subsequently consolidated at 1.3626, down 0.19%.
The pair was likely to find support at 1.3367, the low of January 19 and resistance at 1.3855, the high of February 28.
Concerns that the debt crisis in the euro zone is escalating mounted, following news reports that Germany’s government has planned to firewall the country’s banking sector in the event that Greece is forced to default on its debts.
Earlier Monday, Greece’s deputy finance minister said the country has cash to operate until next month.
Meanwhile, France’s largest banks, BNP Paribas SA, Société Générale SA and Credit Agricole SA, could be facings ratings cuts from Moody’s Investor Services later in the week, due to their exposure to Greek sovereign debt.
The single currency remained supported amid speculation that the European Central Bank was buying Spanish and Italian government debt, in order to keep borrowing costs at affordable levels.
Elsewhere, the euro was sharply lower against the yen, with EUR/JPY tumbling 0.96% to trade close to a 10-year low at 104.89.
Later Monday, German Chancellor Angela Merkel was to hold talks on the euro zone debt crisis with European Commission President Jose Manuel Barroso.
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