Investing.com – The euro erased losses against the U.S. dollar on Monday, rebounding from an eight-month low amid hopes that the European Central Bank may cut rates in an attempt to support the euro zone’s economy.
EUR/USD pulled back from 1.3364, the pair’s lowest since January 18 to hit 1.3527 during European early afternoon trade, easing up 0.22%.
The pair was likely to find support at 1.3088, the low of January 13 and short-term resistance at 1.3566, last Friday’s high.
The euro found support after ECB Governing Council Member Ewald Nowotny said that a reduction in interest rates could not be ruled out. “The ECB never pre-commits, and rate cuts cannot be excluded. It all depends on the developments ahead," he said.
A smaller-than-expected decline in the Ifo index of German business confidence for September also helped market sentiment.
The euro fell sharply earlier after weekend meetings of leaders from the G-20 nations and the International Monetary Fund resulted in no fresh steps to tackle the debt crisis in the euro zone.
The single currency remained under pressure after Germany’s deputy finance minister said Sunday that a decision on Greece’s next tranche of aid was now unlikely to be made at a meeting on October 3rd as previously expected.
Elsewhere, the euro was down against the pound, with EUR/GBP shedding 0.24% to hit 0.8716.
Later in the day, the U.S. was to produce government data on new home sales.
EUR/USD pulled back from 1.3364, the pair’s lowest since January 18 to hit 1.3527 during European early afternoon trade, easing up 0.22%.
The pair was likely to find support at 1.3088, the low of January 13 and short-term resistance at 1.3566, last Friday’s high.
The euro found support after ECB Governing Council Member Ewald Nowotny said that a reduction in interest rates could not be ruled out. “The ECB never pre-commits, and rate cuts cannot be excluded. It all depends on the developments ahead," he said.
A smaller-than-expected decline in the Ifo index of German business confidence for September also helped market sentiment.
The euro fell sharply earlier after weekend meetings of leaders from the G-20 nations and the International Monetary Fund resulted in no fresh steps to tackle the debt crisis in the euro zone.
The single currency remained under pressure after Germany’s deputy finance minister said Sunday that a decision on Greece’s next tranche of aid was now unlikely to be made at a meeting on October 3rd as previously expected.
Elsewhere, the euro was down against the pound, with EUR/GBP shedding 0.24% to hit 0.8716.
Later in the day, the U.S. was to produce government data on new home sales.