Forexpros – The euro dropped to a three-week low against the U.S. dollar on Monday, as fears that the region’s debt crisis is worsening and concerns that the U.S. economy is sliding back into a recession spurred a flight to safety.
EUR/USD hit 1.4137 during late Asian trade, the pair’s lowest since August 11; the pair subsequently consolidated at 1.4141, shedding 0.45%.
The pair was likely to find support at 1.4054, the low of August 5 and resistance at 1.4287, last Friday’s high.
The euro came under renewed pressure after German Chancellor Angela Merkel’s ruling party were defeated in local elections on Sunday, amid dissatisfaction over her handling of the euro zone debt crisis.
In the U.S., Friday’s data showing that the U.S. economy added virtually no jobs in August for the first time in almost a year added to expectations that the Federal Reserve will embark on a third round of monetary stimulus, to shore up faltering U.S. growth.
The euro was also lower against the pound, with EUR/GBP slipping 0.16% to hit 0.8745.
Later in the day, the euro zone was to publish official data on retail sales, as well as revised data on service sector growth and data on investor confidence. Meanwhile, markets in the U.S. were to remain closed for the Labor Day holiday.
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