Forexpros – The euro fell against the U.S. dollar on Tuesday, after Standard & Poor’s warned that it may carry out a mass downgrade on the ratings of euro zone countries if European leaders fail to agree on measures to resolve the region’s debt crisis at a summit on Friday.
EUR/USD hit 1.3336 during late Asian trade, the pair’s lowest since November 30; the pair subsequently consolidated at 1.3343, shedding 0.43%.
The pair was likely to find support at 1.3258, the low of November 30 and resistance at 1.3406, the day’s high.
S&P put the long-term sovereign-debt ratings of 15 euro zone members, including Germany, Italy and Spain on negative watch and flagged a potential two-notch downgrade for France.
This means that there is a 50% chance of a downgrade within 90 days but the firm said it plans to announce any ratings changes “as soon as possible” after Friday’s European Union summit.
The announcement came after French and German leaders outlined proposals to enforce stricter budget rules in the euro zone, to be discussed at Friday’s summit.
Euro Group President Jean-Claude Juncker called the move “shocking” and “exaggerated.”
The euro was also lower against the pound, with EUR/GBP slipping 0.25% to hit 0.8542.
Later in the day, the euro zone was to produce revised data on gross domestic product, while Germany was to publish official data on factory orders.
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