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Forex - EUR/USD close to 4-month high as rate view supports

Published 03/07/2011, 02:21 AM
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EUR/GBP
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Investing.com – The euro edged up against the U.S. dollar on Monday, trading close to a four-month high, supported by expectations that the European Central Bank may raise interest rates as early as April.

EUR/USD hit 1.3999 during late Asian trade, the daily high; the pair subsequently consolidated at 1.3989, easing up 0.02%.

The pair was likely to find support at 1.3832, Thursday’s low and resistance at 1.4084, the high of November 8.

On Friday, the U.S. non-farm payrolls report showed an increase of 192,000 jobs as private employers hired 222,000 workers, the most since April. The unemployment rate unexpectedly dipped to 8.9%, the lowest since April 2009, from 9.0% in January.

While better-than-expected, the data disappointed some investors who see strong U.S. jobs growth as necessary for the Federal Reserve to end its second round of quantitative easing and raise interest rates.

Meanwhile, the euro was boosted after ECB President Jean-Claude Trichet said Thursday the ECB may hike interest rates in April.

The euro was also higher against the pound, with EUR/GBP edging up 0.07% to hit 0.8603.

Later in the day, ECB head Jean-Claude Trichet was to speak at a public engagement, while the Sentix research institute was to publish a report on investor confidence in the euro zone. Also Monday, the U.S. was to publish official data on consumer credit.

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