Forex - EUR/USD sharply lower on Greece concerns, U.S. data

Investing.com – The euro was sharply lower against the U.S. dollar on Wednesday, as uncertainty over Greece’s sovereign debt crisis weighed and after U.S. data showed that core inflation rose more-than-expected last month.

EUR/USD hit 1.4265 during early U.S. trade, the pair’s lowest since May 30; the pair subsequently consolidated at 1.4302, tumbling 0.96%.

The pair was likely to find support at 1.4124, the low of May 27 and resistance at 1.4450, the days high.

An emergency session of European Union finance ministers on Tuesday failed to reach an agreement on how private holders of Greek debt should share the cost of a new aid package for Greece, with the European Central Bank warning that such a move could constitute a default.

Meanwhile, ratings agency Moody's placed three of Frances largest lenders under review, pending possible downgrades due to their exposure to Greek debt.

The dollar gained broadly after the U.S. Labor Department said earlier that consumer prices rose a seasonally adjusted 0.2% in May, after a 0.4% increase the previous month. Core inflation, which excludes volatile energy and food costs, rose by a monthly 0.3% in May, the biggest jump since July 2008, after rising by 0.2% in April.

Economists had forecast a 0.1% rise in overall prices, and a 0.2% gain for core inflation.

The report said the rise in underlying inflation was mainly driven by price increases for clothing, housing, new vehicles and recreation.

The euro was also lower against the pound, with EUR/GBP shedding 0.29% to hit 0.8795.

Also Wednesday, the New York Federal Reserve said its index of manufacturing conditions fell significantly more-than-expected in June, falling into negative territory for the first time since November.

The bank’s index of general business conditions tumbled to -7.8 in June from 11.9 in May. Analysts had expected the index to climb to 13.0 in June.