Investing.com - The euro edged higher against the U.S. dollar on Monday, as market sentiment improved in thin year-end trade, although demand for the greenback still remained supported.
EUR/USD hit 1.3779 during European afternoon trade, the pair's highest since Friday; the pair subsequently consolidated at 1.3784, rising 0.29%.
The pair was likely to find support at 1.3693, Friday's low and resistance at 1.3811, the high of December 11.
Trading volumes were thin as many investors already closed books before the end of the year, reducing liquidity in the market and increasing volatility, which helped exaggerate market moves.
The euro strengthened after European Central Bank Governing Council member Jens Weidmann on Friday said keeping interest rates low may endanger political reforms.
According to Germany’s Bild newspaper, Weidmann said low inflation shouldn’t be used to justify loose monetary policy. "We must take care to raise interest rates again in a timely manner should inflation pressures build," he reportedly added.
Meanwhile, the greenback still remained supported amid expectations of further stimulus tapering by the Federal Reserve. The U.S. central bank will start reducing its bond-buying stimulus program by USD10 billion a month in January, amid indications of an improving U.S. economy.
The euro was also higher against the pound, with EUR/GBP gaining 0.28% to 0.8364.
Later in the day, the U.S. was to release industry data on pending home sales.
EUR/USD hit 1.3779 during European afternoon trade, the pair's highest since Friday; the pair subsequently consolidated at 1.3784, rising 0.29%.
The pair was likely to find support at 1.3693, Friday's low and resistance at 1.3811, the high of December 11.
Trading volumes were thin as many investors already closed books before the end of the year, reducing liquidity in the market and increasing volatility, which helped exaggerate market moves.
The euro strengthened after European Central Bank Governing Council member Jens Weidmann on Friday said keeping interest rates low may endanger political reforms.
According to Germany’s Bild newspaper, Weidmann said low inflation shouldn’t be used to justify loose monetary policy. "We must take care to raise interest rates again in a timely manner should inflation pressures build," he reportedly added.
Meanwhile, the greenback still remained supported amid expectations of further stimulus tapering by the Federal Reserve. The U.S. central bank will start reducing its bond-buying stimulus program by USD10 billion a month in January, amid indications of an improving U.S. economy.
The euro was also higher against the pound, with EUR/GBP gaining 0.28% to 0.8364.
Later in the day, the U.S. was to release industry data on pending home sales.