Forexpros – The euro remained sharply lower against the U.S. dollar on Tuesday, as Greece’s call for a referendum on the recent bailout deal sparked fresh concerns over the debt crisis in the euro zone.
EUR/USD hit 1.3609 during U.S. morning trade, the pair’s lowest since October 12; the pair subsequently consolidated at 1.3660, tumbling 1.42%.
The pair was likely to find support at 1.3518, the low of September 29 and resistance at 1.3900, the high of October 21.
The single currency came under pressure amid fears that Greece could move closer to a sovereign default, increasing the risk of contagion in global financial markets, if the vote on the bailout deal is rejected.
Speaking in the wake of the shock announcement, Eurogroup Chairman Jean-Claude Juncker said it had piled “great nervousness and insecurity” onto an already very insecure situation for the euro zone economy.
German Chancellor Angela Merkel and French President Nicolas Sarkozy planned to meet with Greek officials in Cannes on Wednesday, ahead of the November 3-4 Group of 20 meetings.
France and Germany expressed hopes to implement the package of anti-crisis measures agreed on at last Thursday’s European Union summit “in the quickest time frame.”
Meanwhile, industry data showed that the pace of U.S. manufacturing activity slowed unexpectedly in October.
The Institute for Supply Management said its index of purchasing managers dipped to 50.8 from 51.6 the previous month, confounding expectations for a gain to 52.1.
The euro was also down against the pound with EUR/GBP shedding 0.49%, to hit 0.8571.
Also Tuesday, government data showed that Chinese manufacturing activity fell to its lowest level since February 2009 in October, while the Reserve Bank of Australia’s decision to cut interest rates for the first time in more than two years underlined weakness in the global economy.
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