Investing.com - The euro traded lower against the dollar on Wednesday, recouping some strength after falling on the Federal Reserve's reasonably upbeat assessment of the U.S. economy coupled with JPMorgan Chase's announcement it will hike dividend payments, the result of passing a Fed stress test.
In Asian trading on Wednesday, EUR/USD hit 1.3077, down 0.05%, up from a session low of 1.3074 and off from a high of 1.3090.
The pair was likely to test support at 1.3052, Tuesday’s low, and resistance at 1.3191, Tuesday's high.
The Federal Reserve on Tuesday gave a reasonably positive view of the U.S. economy and left interest rates unchanged.
While headwinds such as weak housing, high oil prices and others face the U.S. economy, unemployment rates are falling and recovery is moving along.
It was what the Fed didn't say that fueled optimism.
The Fed made no real mention of a need to roll out a new round of quantitative easing, bond purchases from banks designed to jolt the economy, which sent the dollar rising against the euro.
The U.S. currency weakens under quantitative easing, as asset purchases from banks designed to steer the economy away from deflationary cycles flood the economy with dollars.
Shortly afterwards, U.S. financial institution JPMorgan Chase declared a quarterly dividend of USD0.30 per share on the bank's common stock, an increase of USD0.05 per share.
JPMorgan Chase also authorized a new USD15 billion equity repurchase program.
The Federal Reserve gave the bank the green light to raise dividends after the firm passed a stress test required on all institutions, which demand them to demonstrate how well they would hold up under duress.
Banks are required to undergo stress tests, as mandated by the Dodd-Frank financial reform law born in wake of the Lehman Brothers collapse.
Other banks passing stress tests included Bank of America, Wells Fargo, Bank of New York Mellon, Morgan Stanley, PNC Financial, US Bancorp and BB&T.
Also in the U.S. retails sales came in line with expectations, growing 1.1% in February from January.
U.S. economic indicators served as the pair's chief steering current.
In Europe, the ZEW Centre for Economic Research revealed its index of German economic sentiment advanced to its highest level since June 2010 in March, climbing to 22.3, outpacing expectations for a reading of 10.5.
Also in Europe, Spain agreed to demands from eurozone finance ministers to slash its budget deficit target for 2012 to 5.3% of gross domestic product instead of its original 5.8% target.
The euro, meanwhile, was down against the pound and up against the yen, with EUR/GBP trading down 0.04% at 0.8327 and EUR/JPY up 0.01% at 108.52.
Later Wednesday in the U.S., Fed Chairman Ben Bernanke is due to speak.
Also in the U.S., the government is to produce official data on the country’s current account, as well as data on import prices and crude oil stockpiles.
The U.K. will unveil claimant count change data, an early indication on the employment situation, as well data on the country’s unemployment rate.
The eurozone will release inflation figures on Wednesday.
In Asian trading on Wednesday, EUR/USD hit 1.3077, down 0.05%, up from a session low of 1.3074 and off from a high of 1.3090.
The pair was likely to test support at 1.3052, Tuesday’s low, and resistance at 1.3191, Tuesday's high.
The Federal Reserve on Tuesday gave a reasonably positive view of the U.S. economy and left interest rates unchanged.
While headwinds such as weak housing, high oil prices and others face the U.S. economy, unemployment rates are falling and recovery is moving along.
It was what the Fed didn't say that fueled optimism.
The Fed made no real mention of a need to roll out a new round of quantitative easing, bond purchases from banks designed to jolt the economy, which sent the dollar rising against the euro.
The U.S. currency weakens under quantitative easing, as asset purchases from banks designed to steer the economy away from deflationary cycles flood the economy with dollars.
Shortly afterwards, U.S. financial institution JPMorgan Chase declared a quarterly dividend of USD0.30 per share on the bank's common stock, an increase of USD0.05 per share.
JPMorgan Chase also authorized a new USD15 billion equity repurchase program.
The Federal Reserve gave the bank the green light to raise dividends after the firm passed a stress test required on all institutions, which demand them to demonstrate how well they would hold up under duress.
Banks are required to undergo stress tests, as mandated by the Dodd-Frank financial reform law born in wake of the Lehman Brothers collapse.
Other banks passing stress tests included Bank of America, Wells Fargo, Bank of New York Mellon, Morgan Stanley, PNC Financial, US Bancorp and BB&T.
Also in the U.S. retails sales came in line with expectations, growing 1.1% in February from January.
U.S. economic indicators served as the pair's chief steering current.
In Europe, the ZEW Centre for Economic Research revealed its index of German economic sentiment advanced to its highest level since June 2010 in March, climbing to 22.3, outpacing expectations for a reading of 10.5.
Also in Europe, Spain agreed to demands from eurozone finance ministers to slash its budget deficit target for 2012 to 5.3% of gross domestic product instead of its original 5.8% target.
The euro, meanwhile, was down against the pound and up against the yen, with EUR/GBP trading down 0.04% at 0.8327 and EUR/JPY up 0.01% at 108.52.
Later Wednesday in the U.S., Fed Chairman Ben Bernanke is due to speak.
Also in the U.S., the government is to produce official data on the country’s current account, as well as data on import prices and crude oil stockpiles.
The U.K. will unveil claimant count change data, an early indication on the employment situation, as well data on the country’s unemployment rate.
The eurozone will release inflation figures on Wednesday.