Forexpros – The euro weakened against the dollar on Monday as investors restocked up on dollar positions sold last week when the U.S. government reported that the country’s economy grew only 2.2% in the first quarter, less than hoped.
In Asian trading on Monday, EUR/USD was trading at 1.3238, down 0.12%, up from a session low of 1.3237 and off from a high of 1.3247.
The pair was likely to find support at 1.3158, the low on April 27, and resistance at 1.3270, the high of April 27.
In the U.S. on Friday, the Commerce Department reported the country’s gross domestic product grew 2.2% in the first quarter, below estimates for a 2.5% gain.
The news sparked a dollar sell-off on fears the Federal Reserve will consider stimulating the economy via quantitative easing, bond buybacks from banks that increase liquidity and weaken the dollar with the hopes of spurring price stability and hiring.
In Asian trading on Monday, investors went long on the dollar on fears the euro will weaken now that the market has had time to digest a recent Standard & Poor’s decision to downgrade Spain.
The U.S. ratings agency also slapped a negative outlook on the country as well.
Furthermore, Spain’s jobless rate hit 24.4%, an 18-year high, the National Statistics Institute reported.
The euro, meanwhile, was down against the pound and flat against the yen, with EUR/GBP trading down 0.20% at 0.8133 and EUR/JPY trading at 106.40.
Later Monday, the eurozone is to release preliminary inflation data, while the ECB is to publish a report on money supply.
Germany meanwhile is to release official data on retail sales, a primary gauge of consumer spending.
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