The euro hit a 4-month low against the dollar today. The fault lies above all with the financial stability of the eurozone jeopardized by the Cyprus bailout and by Italy's political uncertainty.
In the morning, the EUR/USD exchange rate touched 1,2882 (the lowest since November 21st); at 14.12 the exchange rate stood at 1,2861. Short-term support at 1,2699 (low since Nov 14th) and resistance at 1,2866 (high of the session).
Fears remain among investors that the Cyprus bailout deal could set a precedent for forthcoming bailouts of financially troubled eurozone countries. And in Italy uncertainty is increasing due to the political stalemate and the difficulties in forming a new government (the declaration of the leader of the Pd Pierluigi Bersani, who said that “only the insane would want to govern Italy), is quite explanatory).
The euro was down against the pound and against the yen, with EUR/GBP shedding 0,35% to 0,8455 and EUR/JPY shedding 0,91% to 120,37.
