Forexpros – The euro trimmed losses against the U.S. dollar in choppy trade on Monday, pulling back from a two-day low amid speculation that Italian Prime Minister Silvio Berlusconi could resign.
EUR/USD pulled away from 1.3682, the pair’s lowest since Thursday, to hit 1.3788 during U.S. morning trade, down 0.02% over the day.
The pair was likely to find support at 1.3655, last Thursday’s low and resistance at 1.3868, Friday’s high.
Speculation that Prime Minister Berlusconi could resign fanned hopes for a political breakthrough in Italy, ahead of a keenly awaited parliamentary vote on public finances on Tuesday.
But the single currency remained under pressure after official data showed that German industrial output fell more-than-expected in September.
Industrial production dropped by a seasonally adjusted 2.7% in September, a much larger fall than the 0.9% drop forecast by economists, adding to concerns over a slowdown in the euro zone’s largest economy. The report also said production was expected to continue to slow over the coming months as a result of fewer orders.
A separate report showed that retail sales in the single currency bloc fell more-than-expected in September, dropping 0.7%, far more than expectations for a 0.1% decline.
Elsewhere, the euro was slightly lower against the pound, with EUR/GBP slipping 0.09% to hit 0.8593.
Also Monday, Greece’s Finance Minister Evangelos Venizelos held “a positive and productive discussion” with European Union Economic and Monetary Affairs Commissioner Olli Rehn, to discuss the disbursement of Greece’s next tranche of financial aid.
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