Forex - EUR/USD buoyed by Greece aid hopes

Published 11/14/2012, 10:13 AM
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Investing.com - The euro held gains against the U.S. dollar on Wednesday, as demand for the single currency as bolstered by speculation that aid payments for Greece could be bundled into one large lump sum.

EUR/USD hit 1.2756 during U.S. morning trade, the pair’s highest since November 9; the pair subsequently consolidated at 1.2744, gaining 0.31%.

The pair was likely to find support at 1.2660, Tuesday’s low and a two-month low and resistance at 1.2789, the high of November 9.

The euro remained supported after German newspaper Bild reported Tuesday that Greece could receive three bailout installments in one single payment of EUR44 billion, citing German government sources.

The euro hit session highs against the greenback earlier after Italy saw borrowing costs fall to the lowest level since October 2010 at an auction of three-year government bonds.

But concerns that the economic outlook for the euro zone is worsening were underlined after official data showed that industrial production in the bloc tumbled 2.5% in September, compared to expectations for a 1.9% decline.

In the U.S., official data showed that retail sales fell by 0.3% in October, disappointing expectations for a 0.2% decline, while core retail sales, which exclude automobile sales, were flat last month.

A separate report showed that producer price inflation in the U.S. fell unexpectedly in October, while core prices also dipped.

The euro was higher against the pound, with EUR/GBP rising 0.31% to 0.8028 and rallied against the broadly weaker yen, with EUR/JPY jumping 1.51% to 102.35.

The yen came under broad selling pressure after Japan’s Prime Minister Yoshihiko Noda said Wednesday that he is willing to dissolve the lower house of parliament on November 16, setting the stage for elections in December.

The Federal Reserve was to publish the minutes of its most recent policy-setting meeting later in the session.



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