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Forex - Dollar higher against euro as risk sentiment weakens

Published 05/03/2011, 06:51 AM
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Investing.com – The U.S. dollar regained some ground against the euro on Tuesday, climbing to a four-day high as risk sentiment weakened amid security fears after this weeks killing of Al Qaeda leader Osama bin Laden.

EUR/USD hit 1.4755 during European late morning trade, the pair’s lowest since April 27; the pair subsequently consolidated at 1.4768, shedding 0.41%.

The pair was likely to find support at 1.4631, the low of April 27and resistance at 1.4901, Monday’s high and a 16-month high.

Earlier in the day, the U.S. and Australia increased security at their embassies, while Interpol told its 188 member countries to be on “full alert” after President Barack Obama Sunday announced the killing of the Al Qaeda leader in Pakistan.

Also Tuesday, official data showed that European producer price inflation unexpectedly accelerated to the fastest pace in two-and-a-half-years in March.

Eurostat said factory gate prices jumped 6.7% from a year earlier, rising at the fastest rate since September 2008. Economists had expected factory gate prices to rise by 6.6%. Prices rose 0.7% on the month, in line with expectations.

Meanwhile, the euro was sharply higher against the pound, with EUR/GBP surging 0.70% to hit 0.8965.

Later Tuesday, the U.S. was to release government data on factory orders.

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