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EUR/USD Eases Off 4-month Low But Debt Concerns Linger
Written by article default Monday, 10 January 2011 17:25
The euro eased off a four-month low against the dollar on Monday, but gains were limited as lingering concerns over euro zone sovereign debt deterred investors.EUR/USD clawed up from 1.2875, the pair’s lowest since September 14, to hit 1.291 during European late afternoon trade, gaining 0.03%.
The pair was likely to find support at 1.2702, the low of September 13 and resistance at 1.302, last Friday’s high.
Over the weekend, reports in the German press suggested that France and Germany were putting Portugal under pressure to accept an Irish-style bailout package from the International Monetary Fund and the European Union to prevent the regions debt crisis from spreading.
German Finance Minister Wolfgang Schaeuble said on Monday Germany was not forcing any country to seek aid.
Meanwhile, the cost of insuring European sovereign debt against default rose to a new record high Monday, ahead of euro-zone government bond auctions scheduled to take place later in the week.
The euro was also higher against the pound, with EUR/GBP rising 0.3% to hit 0.8327.
Elsewhere Monday, European Central Bank President Jean-Claude Trichet, speaking in his capacity as chairman of the bimonthly Global Economy Meeting said the recovery of the global economy was “confirmed.”
The recovery, is “particularly, I have to say, impressive in the emerging economies,” Trichet said. “But it is confirmed at the global level”.