Forexpros – The euro extended losses against the U.S. dollar on Tuesday, as concerns over the debt crisis in the euro zone intensified ahead of an upcoming European Union summit and while negative market news also weighed on sentiment.
EUR/USD hit 1.3657 during European afternoon trade, the pair’s lowest since October 12; the pair subsequently consolidated at 1.3681, shedding 0.40%.
The pair was likely to find support at 1.3582, the low of October 12 and resistance at 1.3913, Monday’s high and a one-month high.
The ZEW Centre for Economic Research said earlier that its index of German economic sentiment fell to minus 48.3 October from a reading of minus 43.3 in September.
It was the eight consecutive monthly decline in the index and the lowest level since November 2008 and added to fears over a recession in the euro zone’s largest economy.
Analysts had expected the index to decline to minus 45.0 in October.
The report came a day after hopes for a comprehensive solution to the euro zone’s financial woes were quashed after Germany’s finance minister said the October 23 EU summit would not provide a “definitive solution” to the region’s debt crisis.
Late Monday, Moody’s Investors Service put France on three months notice that “pressure from weaker debt metrics,” could leave the country with a negative credit outlook and could result in a downgrade.
Elsewhere, official data showed that China’s economy grew by 9.1% in the third quarter, slightly below forecasts for growth of 9.3%, indicating the world’s second-largest economy expanded at its slowest pace since the second quarter of 2009.
The euro was also lower against the pound, with EUR/GBP shedding 0.32% to hit 0.8697.
Later in the day, the U.S. was to release a government report on producer price inflation, while Federal Reserve Chairman Ben Bernanke was due to speak in Boston.
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