Euro Bounces from Near One-month Lows Against the Dollar

By: DailyForex

The Euro, which initially headed lower for a sixth straight day, bounced back from a near one-month low against the dollar, aided by a bounce in equity markets. However, the rally in Euro was held back by massive sales by sovereign accounts.

The Euro recent weakness is attributed to concerns over the cost of supporting peripheral euro-zone countries as the yield spread between government bonds issued by Ireland and Greece and those issued by Germany widened last week.

Positive news on stronger than expected growth in Germany were overlooked. "The problem for the euro is that growth is rather concentrated in Germany, with the periphery still struggling," said analysts at Credit Agricole CIB in a note to clients.

Technical analysts noted next support around $1.2700, a trendline taken from this year's low in the $1.1880 area.

The euro recovered from early losses against the yen to trade at 110.20 yen, up 0.2 percent on the day EUR/JPY.