The EUR hit fresh session lows against the dollar on Monday, as renewed political tensions in Spain and Italy and weak Spanish employment data undermined investor confidence in the single currency. EUR/USD hit 1.3549 during U.S. morning trade, the pair’s lowest since Thursday; the pair subsequently consolidated at 1.3558, shedding 0.61%. The pair was likely to find support at 1.3481, last Wednesday’s low and resistance at 1.3658, the session high. The yield on Spanish 10-year bonds rose to 5.43% on Monday from 5.21% on Friday, as investor concerns over the deepening political crisis mounted. Italian 10-year bond yields rose to 4.42% on Monday amid uncertainty over the outcome of upcoming elections as former Prime Minister Silvio Berlusconi gained ground in opinion polls. Sentiment on the single currency was also hit after French Finance Minister Pierre Moscovici warned that the euro was too strong following its recent rally. The euro was sharply lower against the pound and the yen, with EUR/GBP falling 0.87% to 0.8615 and EUR/JPY down 0.71% to 125.70. In the U.S., official data showed that factory orders rose 1.8% in December, compared to expectations for a gain of 2.2%.
EasyForexNews Research Team