Forexpros – The euro remained lower against the U.S. dollar on Thursday, amid skepticism that a summit of European leaders in Brussels will deliver meaningful steps to tackle the debt crisis in the region.
EUR/USD hit 1.2408 during U.S. morning trade, the pair’s lowest since June 4; the pair subsequently consolidated at 1.2439, down 0.24%.
The pair was likely to find support at 1.2441, Monday’s low and a two-week low and resistance at 1.2582, the high of June 22.
Hopes that European leaders would make headway on dealing with the crisis dimmed after a German government official indicated that the summit would not result in any detailed decisions and warned against high expectations among investors ahead of the conclusion of the summit on Friday.
Earlier in the week, German Chancellor Angel Merkel reiterated her opposition to the idea of joint euro zone bonds, while EU Economic and Monetary Affairs Commissioner Olli Rehn said Wednesday that the summit would focus on short-term measures to stabilize markets and ease pressure on at-risk countries.
Adding to the negative tone, Italy saw long term borrowing costs rose to 6.19%, their highest level since December, following an auction of 10-year bonds, while yields on five-year bonds rose to 5.84% compared with 5.66% at a previous auction, as investor sentiment on the country continued to deteriorate.
Meanwhile, the yield on Spanish 10-year bonds ticked up to 7%, the level that prompted Greece, Ireland and Portugal to seek international bailouts.
The euro edged higher against the pound, with EUR/GBP easing up 0.07% to 0.8014, but remained close to a three-week low against the yen, with EUR/JPY shedding 0.69% to hit 98.71.
In the U.S., the Department of Labor said number of people who filed for unemployment assistance last week fell by 6,000 to a seasonally adjusted 386,000, compared to expectations for a decline of 7,000 to 385,000.
The previous week’s figure was revised up to 392,000 from a previously reported 387,000.
A separate report confirmed that the U.S. economy expanded at an annualized rate of 1.9% during the first quarter, in line with expectations.
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