FOREX Watch: Euro declines on Eurogroup meetings
The common currency declined broadly Friday as market participants weighed the economic situation in Europe and North America. The euro closed out the week with no major data to report, but was weighed down after the Eurogroup finance ministers coalesced around the Cyprus bailout. Eurogroup official approved the next bailout tranche for the cash-strapped island nation, which is valued at €1.5 billion. Officials are expected to discuss the Greece situation at the next Eurogroup meetings.
The Hellenic nation is reportedly seeking a third bailout as early as 2014. According to Greek Finance Minister Yiannis Stournaras, Greece is seeking around €10 billion from international creditors. Since 2010, Greece has received around €220 billion in financial aid.
The euro fell more than half a percent against the British pound, hitting a low of 0.8357 in the European session. The British pound is enjoying a strong bid, attracting investors to an improving UK environment. British unemployment declined more than 32,000 in August, sending the unemployment rate lower to 7.7 percent (closer to the central bank threshold). Last month Bank of England Governor Mark Carney announced interest rates will remain at record lows until unemployment reached 7 percent, which the central bank expects to occur in 2016. The EURGBP faces a strongly bearish market, with support clusters found in the region of 0.8350/64. The pair is currently trading below the 200 day moving average of 0.8580.
The EURUSD declined as much as a quarter percent before rebounding on negative US data. The pair consolidated at 1.3282, a loss of 0.15 percent. US retail sales grew 0.2 percent in August, shy of expectations for 0.4 percent, which was also the previous month’s reading. The pair failed to sustain its gains in European trade after running into the 1.3312 resistance, forcing it back toward the 1.3280 region.
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