Forexpros – The euro tumbled to a five-week low against the U.S. dollar on Wednesday, as the bond yields of core euro zone states came under pressure, boosting demand for safe haven assets.
EUR/USD hit 1.3430 during late Asian trade, the pair’s lowest since October 10; the pair subsequently consolidated at 1.3442, tumbling 0.73%.
The pair was likely to find support at 1.3360, the low of October 7 and resistance at 1.3538, the day’s high.
Concerns over sovereign debt contagion to core euro zone economies mounted after Italian 10-year bond yields rose to near unsustainable levels on Tuesday, climbing above 7%.
Meanwhile, the yield on Spanish 10-year bonds rose above 6% for the first time since the European Central Bank started buying the country’s bonds in August and French 10-year bond yields climbed to a euro-era high.
Later Wednesday, incoming Italian Prime Minister Mario Monti was due to meet with President Giorgio Napolitano to officially accept the post and present his new government.
The euro was also lower against the pound, with EUR/GBP shedding 0.34% to hit 0.8528.
Also Wednesday, the euro zone and the U.S. were to release official data on consumer price inflation, while the U.S. was also to produce data on industrial production.
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