Investing.com -- EUR/USD surged more than 1% to its highest level in a month as major, longstanding crises in Greece and China occupied the attention of currency traders worldwide.
The currency pair traded in a broad range between 1.1025 and 1.1214 during Wednesday's session, before settling at 1.1162, up 0.012 or 1.09%. The euro moved above 1.12 against its American counterpart for the first time since mid-July, while also closing higher than 1.11 for the first time during the timespan. After nearly falling below 1.08 earlier last month, the euro is now up moderately against the dollar over the last 30 days of trading.
EUR/USD likely gained support at 1.0808, the low from July 20 and was met with resistance at 1.1438, the high from June 18.
One day after Greece agreed on the framework of a multi-year €86 billion bailout, members of Parliament prepared to debate the provisions of the stimulus package during Thursday night's emergency session. While Greece prime minister was forced to accept key concessions on pension and spending cuts, as well as a reduction in early retirement benefits as part of the accord, the Greek Parliament is still expected to approve the deal. If ratified, the deal could be finalized in time for Greece to meet a €3.2 billion obligation to the European Central Bank on August 20.
Elsewhere, Federal Reserve of New York president William Dudley cautioned on Wednesday that the currency interventions by the People's Bank of China this week could have widespread ramifications on the global economy. Speaking at the Rochester Business Alliance in Western New York, Dudley indicated that the PBOC's 1.9% devaluation of the Yuan might have "huge implications," on economic growth worldwide while emphasizing it is still "very early to judge the full impact" of the monetary policy decision.
On Wednesday, the Chinese central bank lowered the value of the renminbi for the second straight day before propping up the currency late in the session when it fell to a four-year low against the dollar at 6.4460. The PBOC is hoping to make Chinese goods more attractive for foreign purchasers after exports nationwide plunged by 8.3% last month.
Separately, Dudley echoed the sentiments of several of his colleagues on the timing of the Fed's first interest rate hike since 2006. Although Dudley said Wednesday that the Federal Open Market Committee is moving closer to raising short-term rates he would not confirm whether it will occur during its two-day monetary policy meeting beginning on September 17.
The Chinese policy decisions and the uncertainty related to the rate hike have weighed on the dollar in recent sessions. The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, fell more than 1.2% on Wednesday to an intraday low of 95.95, its lowest level in more than a month. The index ticked up slightly to 96.30 at the close, to finish down by 1.01%. By comparison, the index soared to a four-month high at 98.40 late last week.