Forex Pros –The euro extended losses against the U.S. dollar on Monday, tumbling to a 10-week low as the single currency came under broad selling pressure amid worries over unresolved sovereign debt issues.
EUR/USD hit 1.3970 during European late morning trade, the pair’s lowest since March 17; the pair subsequently consolidated at 1.4008, tumbling 1.05%.
The pair was likely to find support at 1.3868, the low of March 17 and resistance at 1.4144, the day’s high.
On Sunday, Spain’s ruling Socialist party lost to conservatives in local and regional elections, raising concerns about how the country will address its debt problems.
The results came after Fitch Ratings cut Greece’s debt ratings on Friday, saying a “soft” restructuring of the country’s debt by European Union policy makers would be considered a default event, while Standard &Poor’s cut its outlook for Italy to negative from stable on Saturday.
The euro was also lower against the pound, with EUR/GBP shedding 0.52% to hit 0.8677.
Earlier in the day, preliminary data showed that manufacturing and service sector growth in Germany and the euro zone fell more-than-expected this month.
Germany’s manufacturing purchasing manager’s index was 54.9 for May, a six-month low compared to a final reading of 56.8 for the previous month.
The euro zone manufacturing PMI fell to a seven-month low of 54.8 in May, down from a final reading of 58.0 last month. The euro zone services PMI declined to 55.4 from a final reading of 56.7 in April.
ForexPros.com
