Investing.com - The euro slid lower against the firmer dollar on Wednesday as peripheral euro zone borrowing costs rose but losses were limited as better-than-expected industrial production data indicated that the economy is stabilizing.
EUR/USD hit 1.3267 during European afternoon trade, the session low; the pair subsequently consolidated at 1.3269, shedding 0.33%.
The pair was likely to find support at 1.3190, the low of June 7 and resistance at 1.3334, the session high and a three-and-a-half month high.
The euro came under pressure after Italy saw borrowing costs rise to the highest level since March when the Italy’s treasury auctioned EUR7 billion of 12-month bills at a yield of 0.96%, up from 0.70% previously.
Speculation that the Federal Reserve will begin to unwind its USD85 billion-a-month asset purchase program this year continued to weigh on market sentiment, following a sell-off of risk assets on Tuesday.
The euro found some support after official data showing that industrial production in the euro zone rose for the third consecutive month in April fuelled hopes that the recession in the bloc may be ending.
Eurostat said industrial production rose by a seasonally adjusted 0.4% in April, defying expectations for a 0.2% decline.
The euro trimmed gains against the yen, with EUR/JPY up 0.29% to 128.20 after rising as high as 129.35 earlier in the session.
The single currency tumbled 2.36% against the yen on Tuesday following steep falls in Japanese equities after the Bank of Japan disappointed market expectations for measures to ease volatility in the government bond market.
Elsewhere, the euro fell to three-week lows against the pound, with EUR/GBP down 0.32% to 0.8481.
Sterling was boosted after official data showing that the number of people claiming unemployment benefits in the U.K. fell to the lowest level in two years in May boosted optimism over the economic recovery.
The Office for National Statistics said that the claimant count in the U.K. fell by a seasonally adjusted 8,600 in May, better than expectations for a decline of 5,000 people.
The unemployment rate remained steady at 7.8% in April, in line with expectations.
