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Forex - EUR/USD edges up, supported by rate hike view

Published 03/08/2011, 02:34 AM
EUR/USD
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EUR/GBP
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Investing.com – The euro eased up against the U.S. dollar on Tuesday, hovering below a 4-month high as expectations for a near term interest rate hike by the European Central Bank supported the currency.

EUR/USD hit 1.3988 during late Asian trade, a daily high; the pair subsequently consolidated at 1.3981, adding 0.07%.

The pair was likely to find support at 1.3832, the low of March 3 and resistance at 1.4084, the high of November 8, 2010.

On Monday, Moody's downgraded Greece to B1 from Ba1, with a negative outlook, saying the likelihood that the country will default has risen since June and that it may not meet solvency criteria for official support after 2013.

However, the euro has remained supported after European Central Bank president Jean-Claude Trichet indicated last Thursday that the central bank may raise interest rates next month.

The euro was also up against the pound, with EUR/GBP climbing 0.12% to hit 0.8632.

Later in the day, Germany was to publish official data on factory orders, while France was to publish government data on its trade balance. Also Tuesday, the U.S. was to publish a report on economic optimism.


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