Forexpros – The euro extended losses against the U.S. dollar on Monday, tumbling to a session low as fresh fears over Italy’s financial crisis and weak data on industrial output soured sentiment on the single currency.
EUR/USD hit 1.3616 during U.S. morning trade, the session low; the pair subsequently consolidated at 1.3628, tumbling 0.88%.
The pair was likely to find support at 1.3522, the low of November 9 and resistance at 1.3794, Friday’s high.
Earlier in the day, Italy’s Treasury raised the maximum targeted amount of EUR3 billion at an auction of five-year bonds, but yields rose to a euro-era high of 6.29%, up from 5.32% at a similar auction a month ago.
It was the first auction of Italian government debt since Italy’s president appointed former European Commissioner Mario Monti to head a new government, as the country attempts to implement austerity measures while simultaneously shoring up economic growth.
Last week, the yield on Italian 10-year bonds climbed above the 7% threshold which precipitated bailouts in Greece, Ireland and Portugal, before falling back.
Elsewhere, official data showed that industrial output in the euro zone fell at the fastest pace in two-and-a-half years in September, dropping 2%, slightly less than expectations for a 2.2% decline, but erasing all of the previous month’s 1.4% gain.
The weak data underlined concerns over the threat of an economic downturn in the single currency bloc.
Meanwhile, the euro was slightly higher against the pound, with EUR/GBP up 0.17% to trade at 0.8574.
Also Monday, German Chancellor Angela Merkel said the debt crisis in the euro zone had brought about the continent’s “toughest hour since World War II”.
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