Forexpros – The euro remained lower against the U.S. dollar on Tuesday, but the single currency was supported ahead of a European Union summit, amid hopes that leaders could agree on fresh measures to tackle the crisis in region.
EUR/USD hit 1.2743 during European afternoon trade, the session low; the pair subsequently consolidated at 1.2757, shedding 0.47%.
The pair was likely to find short-term support at 1.2724, Monday’s low and resistance at 1.2819, the session high.
Sentiment on the euro remained fragile ahead of Wednesday’s EU summit, amid concerns over a divide between France’s new President Francois Hollande, who favors measures designed to support growth and pro-austerity Germany.
President Hollande was expected to propose the introduction of joint euro bonds at the summit, but Germany has repeatedly resisted the idea, arguing they would lessen pressure for heavily indebted countries to get their finances in order.
Earlier Tuesday, the Organization for Economic Cooperation and Development cut its growth forecasts for the euro zone for 2012 and 2013 and warned that a “combination of enduring financial fragility, rising unemployment and social pain may spark political contagion and adverse market reaction.”
Elsewhere, Spain successful auctioned EUR2.5 billion of short-term debt, but the country’s borrowing costs rose, pressured higher by sustained concerns over the economic outlook and the health of the country’s banking sector.
The euro was slightly lower against the pound, with EUR/GBP slipping 0.09% to hit 0.8086, but pushed higher against the yen, with EUR/JPY adding 0.23% to hit 101.88.
Later in the day, the U.S. was to release industry data on existing home sales.
Forexpros
