Forex - EUR/USD edges higher ahead of LTRO

Published 02/29/2012, 02:36 AM
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Investing.com - The euro edged higher against the U.S. dollar on Wednesday, as investors awaited the outcome of the European Central Bank's second long-term refinancing operation later in the day.

EUR/USD hit 1.3485 during late Asian trade, the pair’s highest since February 24; the pair subsequently consolidated at 1.3476, gaining 0.13%.

The pair was likely to find support at 1.3356, last Friday’s low and resistance at 1.3485, the high of February 24 and a 12-week high.

In December, the EBC issued EUR489 billion in three-year loans to more than 500 banks, averting a liquidity shortage in the euro zone’s banking system and easing pressure on the region’s bond markets.

The euro came under pressure on Tuesday, after Ireland’s prime minister said the country will hold a referendum on the European Union's new fiscal treaty, which proposes harsh new budgetary discipline on each euro zone state, including near-zero public deficits.

The euro dipped against the pound but edged higher against the yen, with EUR/GBP slipping 0.06% to hit 0.8458 and EUR/JPY inching up 0.10% to hit 108.38.

Later in the day, Finland’s parliament was to vote on Greece’s bailout, while the U.S. was to release a preliminary report on fourth-quarter gross domestic product.

In addition, Federal Reserve Chairman Ben Bernanke was due to testify on the semi-annual monetary policy report before the House Financial Services Committee in Washington.


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