Forexpros – The euro trimmed losses against the U.S. dollar in choppy trade on Wednesday, but euro zone bond yields remained under pressure despite bond purchases by the European Central Bank.
EUR/USD pulled back from 1.3430, the pair’s lowest since October 10, to hit 1.3503 during U.S. morning trade, still down 0.27%.
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 the ability of European leaders to stem the region’s debt crisis pressured the yields of core euro zone economies, with the yield on French 10-year bonds briefly rising to a euro-era high earlier, before falling back.
The yield on Italian 10-year bonds peaked at 7.09%, before falling back below the 7% threshold widely seen as unsustainable for borrowing in the long term.
A spokesman for German Chancellor Angela Merkel said earlier that new Italian Prime Minister Mario Monti needs to put into practice austerity pledges made by the outgoing Italian government, in order to quickly restore market confidence.
Meanwhile, in the U.S. official data showed that industrial production rose more than expected last month, climbing 0.7%. September’s figure was revised to a 0.1% drop from an original estimate of a 0.2% gain.
Analysts had forecast that industrial output would increase by 0.4% in October.
A separate report showed that the U.S. consumer price index dropped 0.1% in October. Analysts had forecast CPI would be flat last month after rising 0.3% in September.
Year-on-year, consumer prices were up 3.5% after rising 3.9% in the full year through September.
Excluding food and energy costs, consumer prices rose 0.1% in October, broadly in line with expectations, after rising by 0.1% in September.
Elsewhere, the euro was higher against the pound, with EUR/GBP climbing 0.21% to hit 0.8575.
Also Wednesday, official data showed that the rate of consumer inflation in the euro zone remained unchanged at 3% in October, in line with expectations.
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