Investing.com - The euro was trading close to a four-month high against the U.S. dollar on Wednesday, after Germany’s constitutional court approved the ratification of the euro zone’s new bailout fund, while prospects for further stimulus by the Federal Reserve continued to weigh on the dollar.
EUR/USD hit 1.2936 during European afternoon trade, the pair’s highest since May 11; the pair subsequently consolidated at 1.2915, gaining 0.47%.
The pair was likely to find support at 1.2816, the session low and resistance at 1.3006, the high of May 9.
The ruling by Germany’s constitutional court will allow the country’s president to ratify the European Stability Mechanism under certain conditions and clear the way for the European Central Bank’s bond purchasing program to proceed.
The court said Germany’s liability to the EMS must not exceed EUR190 billion without the approval of the lower house of parliament and said that both houses of parliament must be kept informed about decisions relating to the ESM.
Following the ruling, Eurogroup head Jean-Claude Juncker said the ESM's board of governors will hold their first meeting on October 8.
Italy saw borrowing drop sharply at an auction of three- and 12-month government bonds following the decision, reflecting growing optimism policymakers in the euro zone will do more to stem the region’s ongoing debt crisis.
The greenback remained under broad selling pressure amid speculation that the U.S. central bank may implement a third round of quantitative easing after its upcoming policy meeting, which concludes on Thursday.
The euro was trading close to multi-month highs against the pound and the yen, with EUR/GBP rising 0.26% 0.8021 and EUR/JPY rising 0.53% to 100.48.
Also Wednesday, German Chancellor Angela Merkel welcomed the court ruling, calling it a good day for Germany and for Europe.
EUR/USD hit 1.2936 during European afternoon trade, the pair’s highest since May 11; the pair subsequently consolidated at 1.2915, gaining 0.47%.
The pair was likely to find support at 1.2816, the session low and resistance at 1.3006, the high of May 9.
The ruling by Germany’s constitutional court will allow the country’s president to ratify the European Stability Mechanism under certain conditions and clear the way for the European Central Bank’s bond purchasing program to proceed.
The court said Germany’s liability to the EMS must not exceed EUR190 billion without the approval of the lower house of parliament and said that both houses of parliament must be kept informed about decisions relating to the ESM.
Following the ruling, Eurogroup head Jean-Claude Juncker said the ESM's board of governors will hold their first meeting on October 8.
Italy saw borrowing drop sharply at an auction of three- and 12-month government bonds following the decision, reflecting growing optimism policymakers in the euro zone will do more to stem the region’s ongoing debt crisis.
The greenback remained under broad selling pressure amid speculation that the U.S. central bank may implement a third round of quantitative easing after its upcoming policy meeting, which concludes on Thursday.
The euro was trading close to multi-month highs against the pound and the yen, with EUR/GBP rising 0.26% 0.8021 and EUR/JPY rising 0.53% to 100.48.
Also Wednesday, German Chancellor Angela Merkel welcomed the court ruling, calling it a good day for Germany and for Europe.