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Forex - EUR/USD extends gains after Barroso remarks

Published 09/28/2011, 06:32 AM
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Investing.com – The euro extended gains against the U.S. dollar on Wednesday, climbing to a one-week high after European Commission President Jose Manuel Barroso said that more would be done to tackle the debt crisis in the euro zone.

EUR/USD hit 1.3690 during European morning trade, the pair’s highest since September 21; the pair subsequently consolidated at 1.3675, gaining 0.65%.

The pair was likely to find support at 1.3478, Tuesday’s low and resistance at 1.3744, the high of September 20.

In a speech to the European Parliament, Barroso indicated that the Commission was looking at ways to beef up the region’s bailout fund, the European Financial Stability Facility.

Barroso also said the European Central Bank should continue its support to the stability of the euro area.

"We trust that the ECB, in full respect of the treaty, will do whatever is necessary to ensure the integrity of the euro and to ensure its financial stability," he said.

The euro added to gains made on the back of growing optimism that Greece is moving closer to receiving it next tranche of aid after the country’s parliament passed a new property tax to meet deficit-reduction targets.

But the single currency's gains were capped by concerns over a lack of consensus among euro zone members on how best to address the financial crisis, with Germany remaining opposed to enlarging the capacity of the EUR440 billion EFSF.

The euro was also higher against the pound, with EUR/GBP rising 0.48% to hit 0.8728.

Later in the day, the U.S. was to publish government data on durable goods orders, while Federal Reserve Chairman Ben Bernanke was scheduled to speak.

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