Investing.com - The euro advanced against the U.S. dollar Wednesday as the International Monetary Fund proposed increasing its lending capacity and word that Greek debt talks may be nearing a solution.
EUR/USD hit a low of 1.2734 during U.S. trade. The pair hit a high of 1.2864 and is currently trading at 1.2851, up 0.92%.
The pair was likely to find support at 1.2648, Tuesday's low and technical resistance exists at 1.2844, the high of January 12th.
The single currency gained strength on reports that the IMF is attempting to increase its lending capacity to USD1 trillion to help protect the global economy from the euro zone crisis.
Additional reports that Greece is close to a deal with its private creditors that would provide the creditors cash and securities with a market value of approximately 32 cents per euro of government debt added to the euro zone's bullish sentiment.
However, Greece is under pressure to obtain an agreement to restructure its debt in order to access new bail out funds and avert a default when an EUR14.4 billion bond redemption comes due on March 20th.
The World Bank slashed its global growth forecast by the most in 36 months, explaining that it forecasts the world economy to grow at 2.5% in 2012, down from a June estimate of 3.6%.
The World Bank added that the euro zone may contract 0.3% and cut its projection for U.S. growth to 2.2% from 2.9%.
In addition, the German government trimmed its 2012 forecast to 0.7% from a previous 1%.
Meanwhile, Germany sold two year notes at a record low yield today and Portugal hit its targeted amount in a sale of 3, 6, and 11 month treasury bills.
Ian Stannard of Morgan Stanley stated to Bloomberg, "The euro will come under increasing pressure through the course of the year."
The Euro advanced against the pound with EUR/GBP adding 0.30% to 0.8331.
In addition Wednesday, U.S. home builder confidence hit the highest level since June, 2007.
Investors are awaiting U.S. building reports and unemployment claims while the European Central Bank is to produce a report on the current account followed by its monthly bulletin, Thursday.
EUR/USD hit a low of 1.2734 during U.S. trade. The pair hit a high of 1.2864 and is currently trading at 1.2851, up 0.92%.
The pair was likely to find support at 1.2648, Tuesday's low and technical resistance exists at 1.2844, the high of January 12th.
The single currency gained strength on reports that the IMF is attempting to increase its lending capacity to USD1 trillion to help protect the global economy from the euro zone crisis.
Additional reports that Greece is close to a deal with its private creditors that would provide the creditors cash and securities with a market value of approximately 32 cents per euro of government debt added to the euro zone's bullish sentiment.
However, Greece is under pressure to obtain an agreement to restructure its debt in order to access new bail out funds and avert a default when an EUR14.4 billion bond redemption comes due on March 20th.
The World Bank slashed its global growth forecast by the most in 36 months, explaining that it forecasts the world economy to grow at 2.5% in 2012, down from a June estimate of 3.6%.
The World Bank added that the euro zone may contract 0.3% and cut its projection for U.S. growth to 2.2% from 2.9%.
In addition, the German government trimmed its 2012 forecast to 0.7% from a previous 1%.
Meanwhile, Germany sold two year notes at a record low yield today and Portugal hit its targeted amount in a sale of 3, 6, and 11 month treasury bills.
Ian Stannard of Morgan Stanley stated to Bloomberg, "The euro will come under increasing pressure through the course of the year."
The Euro advanced against the pound with EUR/GBP adding 0.30% to 0.8331.
In addition Wednesday, U.S. home builder confidence hit the highest level since June, 2007.
Investors are awaiting U.S. building reports and unemployment claims while the European Central Bank is to produce a report on the current account followed by its monthly bulletin, Thursday.