For the 24 hours to 23:00 GMT, EUR declined 1.10% against the USD and closed at 1.2549, as risk aversion rose among investors, after weak economic data from the US, Euro-zone and China heightened fears over the outlook for global growth.
Adding to gloom, ratings agency, Moody’s, downgraded the credit ratings of 15 of the world’s biggest banks.
In the Euro-zone, manufacturing PMI contracted at the fastest pace since June 2009 to 44.8 in June, while preliminary services PMI, rose slightly to a seasonally adjusted 46.8 in June from 46.7 in May. Additionally, consumer confidence fell to a reading of -19.6 in June, while the current account surplus fell to €4.6 billion in April.
In Germany, manufacturing PMI fell to a three-year low of 44.7 in June, while the service sector PMI expanded at a slower-than-expected pace to 50.3 in June. In France, however, both manufacturing and services PMI rose to a reading of 45.3 and 47.3, respectively, in June.
In a bond auction, Spanish treasury sold bond worth €2.2 billion ($2.8 billion) of varied maturities, surpassing the target of €2 billion, but at a higher borrowing costs. Additionally, France sold €8.43 billion bonds with yields falling in the auction.
The Euro also remain under pressure, after late yesterday, Spanish officials stated that nations troubled banks could need as much as €62.0 billion ($78.6 billion) to protect themselves from economic shocks in a worst-case scenario.
Meanwhile, International Monetary Fund (IMF) stated that the Euro-zone crisis has reached a “critical stage” and member nations must make a “strong commitment” to the shared currency to stop the plunge in investor confidence.
In the Asian session, at GMT0300, the pair is trading at 1.2559, with the EUR trading 0.08% higher from yesterday’s close.
The pair is expected to find support at 1.2494, and a fall through could take it to the next support level of 1.2429. The pair is expected to find its first resistance at 1.2662, and a rise through could take it to the next resistance level of 1.2764.
Trading trends in the pair today are expected to be determined by the release of IFO business climate, current assessment and expectations data in Germany. Markets are also eyeing outcome of EU leader’s summit in a day ahead.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.