NEW YORK (Forex News Now) – The euro trimmed Tuesday’s sharp gains versus the dollar on Wednesday (GMT), as FX traders digested a downgrade of Portugal’s credit rating.
In early Asian currency trading, EUR/USD traded at 1.2713, down 0.09 percent on the day, after retreating from Tuesday’s 2-month high of 1.2738.
Moody’s Investor Services, the international ratings agency, on Tuesday cut its rating on Portugal’s government debt by two notches, rekindling fears over Europe’s debt crisis.
According to forex analysis, EUR/USD was likely to touch immediate support around Tuesday’s low, 1.2423, and encounter resistance around the high of May 5, 1.2996.
The euro’s earlier gains came on the back of a successful Greek debt auction and disappointing data on the U.S. trade deficit and U.S. consumer confidence.
Meanwhile, the single currency fell versus sterling: EUR/GBP traded at 0.836, down 0.29 percent on the day.