EUR/USD plummets to lows, farther below mid-1.1300s
• Stronger core PPI helped the USD to recover a major part of the early losses.
• Reviving Italian budgetary concerns further weigh on the shared currency.
The EUR/USD faced rejection near the 1.1400 handle and has now dropped to a fresh intraday low, below mid-1.1300s.
The US Dollar reversed a major part of its early losses following the release of hotter than expected core PPI figures and turned out to be one of the key factors behind the pair's latest leg of a sudden fall over the past hour or so.
According to the US Bureau of Labor Statistics report, the index for final demand (less foods, energy, and trade services) moved up 0.3% in November and advanced 2.8% for the 12 months ended in November.
Meanwhile, the headline PPI print matched consensus estimates and showed a monthly rise of 0.1% during the reported period, with the yearly rate easing to 2.5% from 2.9% recorded in the previous month.
The shared currency was further weighed down by Italian finance minister Giovanni Tria's comments that the government won't make major changes to the budget, which revived concerns over Italy's budget deadlock with the European Commission.
It would now be interesting to see if the pair is able to find any buying interest at lower levels or the current pull-back points to some fresh technical selling, paving the way for a retest of the very important support near the 1.1300 round figure mark.
Valeria Bednarik, FXStreet's own American Chief Analyst writes: “The pair would need to clear the 1.1300 level to the downside or the 1.1430 price zone to the upside, to gain some directional traction, something quite unlikely at this point.”