EUR/USD: Investors Trade Cautiously Ahead Of Euro-Zone's Manufacturing And Service Sector Data

EUR/USD: Investors Trade Cautiously Ahead Of Euro-Zone's Manufacturing And Service Sector Data

For the 24 hours to 23:00 GMT, EUR declined 0.74% against the USD and closed at 1.2974, a day after ratings agency Moody's lowered the credit ratings of Catalonia and four other Spanish regions, citing their worsening liquidity positions and predicting that these regions are likely to ask the central government for aid in 2013.

Meanwhile, the Democratic Left and PASOK Socialist parties in Prime Minister, Antonis Samaras' conservative-led coalition have strongly opposed unpopular proposals from European Union (EU) and International Monetary Fund (IMF) lenders to lower wages, reduce severance payments and scrap automatic wage hikes.

In bond auction, Spanish Treasury sold €967 million worth of three-month government bonds at an average yield of 1.415%, up from 1.203% at a similar auction last month. Spain also sold €2.56 billion of six-month debt at an average yield of 2.023%, down from 2.213% at a similar auction last month.

On the economic front, business confidence index in France declined to a reading of 85.0 in October, from 90.0 in September. Market had expected the index to remain unchanged in October.