The Euro edged higher against the U.S. Dollar in the Asian trading session following Monday’s fall to a 1-week low triggered by growing worries over Spanish debt and the government’s laissez faire attitude toward help. Weaker than expected business sentiment from Germany which heightened investor concerns of slowing growth in the Eurozone also was taken into consideration. IFO business sentiment readings for September hit their lowest level in more than two years, suggesting that the European Central Bank’s efforts to restore confidence have not yet made any impact.
Greek worries also haven’t strayed too far from focus, with a release that the Greek budget deficit is larger than previously anticipated, with Germany’s Der Spiegel newspaper reporting an estimated deficit of €20 billion, double what many believed it to be. While there has been no confirmation from Greek officials yet, it’s enough to make market players jittery and the validity of the data could put significant pressure on the common currency. As reported at 1:26 p.m. (JST) in Tokyo, the EUR/USD was trading at $1.2944, recovering from the overnight low of $1.2891 but well off the 4-month peak struck last week. Support is pegged at $1.2827, the EUR/USD pair’s 200-day moving average.