Investing.com - The euro strengthened slightly against the dollar Thursday on hopes a European Central Bank lending program will spur the economy, while the market put somewhat neutral comments from Fed Chairman Ben Bernanke regarding monetary easing behind them.
In Asian trading on Thursday, EUR/USD hit 1.3330, up 0.04%, gaining from a session low of 1.3319 and off from a high of 1.3333.
The pair was likely to test support at 1.3315, Wednesday's low, and resistance at 1.3486, Wednesday's high.
The euro found itself in a tug-of-of war of forces earlier in U.S., European sessions, which extended into Asia on Thursday.
Federal Reserve Chairman Ben Bernanke told lawmakers that the monetary authority has no immediate plans to roll out a third round of quantitative easing, under which the U.S. central bank buys bonds from banks and floods the market with liquidity to avoid deflation.
The news was bullish for the dollar, although European Central Bank policies on the other side of the Atlantic countered Bernanke's comments.
The ECB has kicked off a second long-term refinancing operation, which makes three-year loans available to banks at attractive interest rates and collateral requirements.
The program aims to increase the value of assets like government debt in participating countries, which is bullish for the euro.
Unlike quantitative easing, the long-term refinancing operation does not involve the ECB stepping in and buying assets directly from banks.
The ECB provided EUR529 billion in three-year loans to European banks after receiving bids from 800 institutions, much more than the central bank's first long-term refinancing operation late last year.
While such a move can weaken the euro as it floods the financial system with liquidity, it can also have a bullish effect in that it may make government bonds in Europe more attractive while improving the economy as a whole.
Still, Europe is not out of the woods yet, and more fundamental changes to indebted economies like those in Greece will need to be carried out before the debt crisis will become a bad memory.
Greece has approved austerity measures but must implement them while making sure its economy grows as much as possible.
In the U.S., meanwhile, reports emerged that the economy grew 3% in the fourth quarter of last year, above analysts' expectations.
The news helped pump up the euro as part of a risk-on trading session.
The euro was flat against the pound and up against the yen, with EUR/GBP trading at 0.8372 and EUR/JPY up 0.13% at 108.26.
On Thursday, Switzerland will release fourth-quarter GDP figures, while the U.K. will release a report on house price inflation as well as data on manufacturing activity.
Eurozone officials will release data on manufacturing activity, consumer price inflation and unemployment.
European Union leaders are to hold the first day of a two-day summit meeting in Brussels.
The U.S. is to release government data on initial jobless claims as well as personal consumption expenditures and personal spending.
Meanwhile, the Institute for Supply Management is to unveil its latest index on manufacturing activity.
In addition, Fed Chairman Bernanke is due to testify for a second day before the Senate Banking Committee.
In Asian trading on Thursday, EUR/USD hit 1.3330, up 0.04%, gaining from a session low of 1.3319 and off from a high of 1.3333.
The pair was likely to test support at 1.3315, Wednesday's low, and resistance at 1.3486, Wednesday's high.
The euro found itself in a tug-of-of war of forces earlier in U.S., European sessions, which extended into Asia on Thursday.
Federal Reserve Chairman Ben Bernanke told lawmakers that the monetary authority has no immediate plans to roll out a third round of quantitative easing, under which the U.S. central bank buys bonds from banks and floods the market with liquidity to avoid deflation.
The news was bullish for the dollar, although European Central Bank policies on the other side of the Atlantic countered Bernanke's comments.
The ECB has kicked off a second long-term refinancing operation, which makes three-year loans available to banks at attractive interest rates and collateral requirements.
The program aims to increase the value of assets like government debt in participating countries, which is bullish for the euro.
Unlike quantitative easing, the long-term refinancing operation does not involve the ECB stepping in and buying assets directly from banks.
The ECB provided EUR529 billion in three-year loans to European banks after receiving bids from 800 institutions, much more than the central bank's first long-term refinancing operation late last year.
While such a move can weaken the euro as it floods the financial system with liquidity, it can also have a bullish effect in that it may make government bonds in Europe more attractive while improving the economy as a whole.
Still, Europe is not out of the woods yet, and more fundamental changes to indebted economies like those in Greece will need to be carried out before the debt crisis will become a bad memory.
Greece has approved austerity measures but must implement them while making sure its economy grows as much as possible.
In the U.S., meanwhile, reports emerged that the economy grew 3% in the fourth quarter of last year, above analysts' expectations.
The news helped pump up the euro as part of a risk-on trading session.
The euro was flat against the pound and up against the yen, with EUR/GBP trading at 0.8372 and EUR/JPY up 0.13% at 108.26.
On Thursday, Switzerland will release fourth-quarter GDP figures, while the U.K. will release a report on house price inflation as well as data on manufacturing activity.
Eurozone officials will release data on manufacturing activity, consumer price inflation and unemployment.
European Union leaders are to hold the first day of a two-day summit meeting in Brussels.
The U.S. is to release government data on initial jobless claims as well as personal consumption expenditures and personal spending.
Meanwhile, the Institute for Supply Management is to unveil its latest index on manufacturing activity.
In addition, Fed Chairman Bernanke is due to testify for a second day before the Senate Banking Committee.