Forexpros - The euro remained lower against the U.S. dollar on Tuesday, trading in a tight range as markets digested the implications of Friday’s disappointing U.S. jobs data while concerns over rising Spanish borrowing costs weighed on risk appetite.
EUR/USD hit 1.3060 during U.S. morning trade, the session low; the pair subsequently consolidated at 1.3086, slipping 0.15%.
The pair was likely to find support at 1.3032, Monday’s low and an almost one-month low and short-term resistance at 1.3163, the high of April 5.
Concerns over high Spanish borrowing costs mounted, as the yield on Spain’s 10-year government bonds ticked up to 5.9% from 5.8% earlier in the day, amid fears that the country will be the next in the euro zone to require a bailout.
The increase in borrowing costs came despite reassurances from Spanish Prime Minister Mariano Rajoy earlier that the country will cut its budget deficit to 3% of gross domestic product in 2013.
Sentiment on the euro was also hit after a report showed that investor sentiment in the euro zone dropped this month, after three successive monthly increases.
Market research group, Sentix said its index of investor confidence declined by 6.5 points to minus 14.7 in April from March’s reading of minus 8.2.
Analysts had expected the index to improve modestly by 0.1 points to minus 8.1 in April.
Meanwhile, the outlook for the U.S. recovery remained clouded after government data on Friday showed that the economy added just 120,000 jobs in March, the lowest number since December and well below expectations for a 203,000 increase.
The euro was higher against the pound, with EUR/GBP gaining 0.25% 0.8268 but declined against the broadly stronger yen, with EUR/JPY dropping 0.82% to hit 105.92.
Also Tuesday, official data showed that French industrial production rose by 0.3% in February, slightly more than expectations for a 0.2% increase, easing concerns over the economic outlook for the euro zone’s second largest economy.
