Forexpros – The euro trimmed losses against the U.S. dollar on Monday, moving back above the key 1.30 support level but the shared currency’s upside was limited as investors eyed the outcome of talks by European Union finance ministers.
EUR/USD pulled back from 1.2983, the pair’s lowest since Thursday, to hit 1.3021 during U.S. morning trade, still down 0.16% on the day.
The pair was likely to find support at 1.2945, the low of December 14 and an 11-month low and resistance at 1.3083, the high of December 16.
EU finance ministers held a teleconference to discuss plans to provide up to EUR200 billion in loans to the International Monetary Fund, as well as changes to the EU treaty that would allow a permanent EUR500 billion bailout fund to be established.
But the euro remained under pressure as the threat of credit rating cuts across the euro zone continued to weigh after ratings agency Fitch lowered France’s credit outlook and put six euro zone countries on review for possible downgrades on Friday.
Over the weekend, European Central Bank President Mario Draghi reiterated his opposition to intervening in the bond markets and buying up sovereign debt in order to ease the region’s debt crisis in an interview with the Financial Times.
The dollar remained supported after strengthening broadly earlier as news of North Korean leader Kim Jong il’s death fanned concerns over potential geopolitical instability in northeast Asia.
The euro was slightly lower against the pound, with EUR/GBP dipping 0.05% to hit 0.8385.
Also Monday, the ECB said that the euro zone current account recorded a deficit of EUR7.5 billion in October, swinging from a surplus of EUR2.2 billion the previous month.
Analysts had expected the region’s current account post a deficit of EUR1.9 billion in October.
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