Forex - EUR/USD remains lower amid debt crisis fears

Forex News – The euro remained lower against the U.S. dollar on Wednesday, as concerns that the financial crisis in the euro zone is deepening saw investors seek refuge in the safe haven greenback.

EUR/USD hit 1.3260 during U.S. morning trade, the daily low; the pair subsequently consolidated at 1.3283, shedding 0.49%.

The pair was likely to find support at 1.3144, Tuesday’s low and an eight-and-a-half month low and resistance at 1.3380, Monday’s high.

Earlier Wednesday, the International Monetary Fund said in a report that effects of the euro zone debt crisis are spreading to the core countries, banks and investors and warned that another recession could not be ruled out.

The report came after data showing that private sector growth in the euro zone contracted for the first time in two years in September.

But the euro was supported by reports that European Union finance ministers were looking at a bank recapitalization plan after agreeing that additional measures are needed support European lenders.

The euro trimmed losses against the dollar earlier after U.S. data showed that private-sector employment rose by a seasonally adjusted 91K in September, beating expectations for an increase of 70K.

Elsewhere in the U.S., the Institute for Supply Management said its services index dipped to 53.0 last month from 53.3 in August but employment in the sector fell to its lowest level since April 2010.

Meanwhile, the euro was fractionally higher against the pound, with EUR/GBP easing up 0.03% to hit 0.8623.

Also Wednesday, German Chancellor Angela Merkel said that Greece must remain part of the euro zone and get "a chance to get back on its feet."