Forexpros – The euro reversed losses against the dollar on Tuesday, steadying after falling on weekend elections results in Greece and France that revealed widespread anger at austerity measures.
Weak U.S. jobs data released on Friday prevented the dollar from taking off against the European currency.
In Asian trading on Tuesday, EUR/USD was trading up 0.03% at 1.3055, up from a session low of 1.3050, and off from a high of 1.3066.
The pair was likely to test support at 1.2956, an earlier U.S.-session low, and resistance at 1.3178, the high of May 4.
Political news out of Europe drove foreign-exchange markets.
In France, socialist Francois Hollande swept into victory over President Nicolas Sarkozy, as voters rejected painful austerity measures supported by the outgoing administration and opted to embrace Hollande’s calls to prioritize growth over cutting spending.
In Greece, the country’s leading political parties failed to secure 50 percent of the votes in parliamentary elections, with far-left and far-right fringe parties eating away at the establishment’s hold on power.
Greek elections served as the market’s chief steering current as fears brewed that Athens would reject austerity measures demanded on it by the International Monetary Fund, the European Commission and the European Central Bank in exchange for bailout assistance, opting instead to abandon the euro down the road.
The dollar, however, battled headwinds of its own.
The greenback was still subdued by Friday’s dismal jobs report, which revealed the country picked up a net 115,000 nonfarm payrolls in April, far below expectations.
Tepid economic indicators suggest loose monetary policies will stay in play in the U.S. and keep the dollar weak.
The euro, meanwhile, was up against the pound and up against the yen, with EUR/GBP up 0.05% at 0.8064 and EUR/JPY trading up 0.05% at 104.32.
Later Tuesday in the eurozone, German industrial production will be released and provide a glimpse into the health of Europe’s largest economy.
Also later in the day, European Central Bank President Mario Draghi is due to speak in Frankfurt.
Forexpros
