Forex - EUR/USD close to 7-week low after U.S. ISM data
Investing.com
Published Sep 06, 2011 10:47AM ET
EUR/USD hit 1.4029 during U.S. morning trade, the pair’s lowest since July 18; the pair subsequently consolidated at 1.4035, shedding 0.44%.
The pair was likely to find short-term support at 1.3950, the low of July 13 and resistance at 1.4172, Monday’s high.
The Institute for Supply Management said its U.S. services index rose to 53.3 last month from 52.7 in July, confounding expectations for a decline to 51.0.
A reading above 50 indicates expansion in the sector.
Earlier in the day, the euro posted broad gains after the Swiss National Bank set a minimum exchange rate target of 1.20 per euro for the Swiss franc and said it was prepared to defend this level by purchasing foreign currency in unlimited quantities.
But the single currency erased gains against the greenback amid concerns that the region’s sovereign debt crisis is worsening.
German Chancellor Angela Merkel warned earlier that a Greek exit from the euro zone could trigger “a dangerous domino-effect," as talks on the next tranche of aid for Athens remained at an impasse.
Meanwhile, uncertainty over the implementation of an austerity package by Italy’s government saw the country’s borrowing costs surge.
Elsewhere, the euro was higher against the pound, with EUR/GBP rising 0.28% to hit 0.8770.
Also Tuesday, official data showed earlier that German factory orders fell significantly more-than-expected in July, dropping for the first time in four months on the back of a decline in export demand.
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Written By: Investing.com
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