Forex – EUR/USD breaks critical support on Italian yields
Published Dec 14, 2011 01:26PM ET
EUR/USD hit a low of 1.2947 during mid session U.S. trade. The pair is off a high of 1.3064 posted earlier, giving back 0.31%.
The pair was likely to find support at 1.2969 and technical resistance exists at 1.3012.
The single currency fell to a 11-month low during the session as Italy's rising yields increased borrowing costs to the highest since 1997.
Meanwhile, Spanish bank borrowing from the ECB hit yearly highs further exacerbating the euro zone crisis.
Yesterday's refusal by the Fed to increase the quantitative easing program did little to ease the euro zone fears.
Norges Bank slashed its main interest rate 50 basis points instead of the forecasted 25, reversing its rate increase trend from 2009 further signaling economic trouble.
Jens Nordvig, a managing director of currency research at Nomura Holdings told Bloomberg Radio, "There is a major funding issue. That's why the news has seen the euro significantly lower."
The Euro was also lower against the pound with EUR/GBP dropping 0.29% to hit 0.8398. Investors are awaiting European Central Bank head Mario Draghi to speak on Thursday, as well as the ECB's monthly bulletin
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Written By: Investing.com
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