Investing.com - The euro extended gains against the U.S. dollar on Tuesday, amid talk over a ‘virtual’ credit line for Spain, while U.S. data showed that consumer prices rose more-than-expected last month.
EUR/USD hit 1.3060 during European afternoon trade, the pair’s highest since October 5; the pair subsequently consolidated at 1.3044, gaining 0.75%.
The pair was likely to find support at 1.2942, the session low and resistance at 1.3120, the high of September 18.
The euro’s gains came amid speculation that Spain will make a request for a credit line from the European Stability Mechanism, in order to satisfy the terms of the European Central Bank’s bond buying program, but then not using it, waiting instead for borrowing costs to fall.
The euro also found support after the ZEW Centre said that its closely watched index of German economic sentiment improved to minus 11.5 in October from September’s reading of minus 18.2. Economists had forecast a reading of minus 15.0 this month.
Separately, official data showed that consumer price inflation in the euro zone slowed to 2.6% in September, down from a preliminary estimate of 2.7%.
In the U.S., the Labor Department said consumer prices rose by 0.6% in September, above expectations for a 0.5% gain on the back of higher gasoline prices.
Consumer prices rose at an annualized rate of 2.0% last month, compared to expectations for a 1.9% increase and up from 1.7% in August.
The euro was higher against the pound and the yen, with EUR/GBP up 0.43% to 0.8092 and EUR/JPY jumping 1.06% to 102.90.
Later in the day, the U.S. was to release government data on industrial production.
EUR/USD hit 1.3060 during European afternoon trade, the pair’s highest since October 5; the pair subsequently consolidated at 1.3044, gaining 0.75%.
The pair was likely to find support at 1.2942, the session low and resistance at 1.3120, the high of September 18.
The euro’s gains came amid speculation that Spain will make a request for a credit line from the European Stability Mechanism, in order to satisfy the terms of the European Central Bank’s bond buying program, but then not using it, waiting instead for borrowing costs to fall.
The euro also found support after the ZEW Centre said that its closely watched index of German economic sentiment improved to minus 11.5 in October from September’s reading of minus 18.2. Economists had forecast a reading of minus 15.0 this month.
Separately, official data showed that consumer price inflation in the euro zone slowed to 2.6% in September, down from a preliminary estimate of 2.7%.
In the U.S., the Labor Department said consumer prices rose by 0.6% in September, above expectations for a 0.5% gain on the back of higher gasoline prices.
Consumer prices rose at an annualized rate of 2.0% last month, compared to expectations for a 1.9% increase and up from 1.7% in August.
The euro was higher against the pound and the yen, with EUR/GBP up 0.43% to 0.8092 and EUR/JPY jumping 1.06% to 102.90.
Later in the day, the U.S. was to release government data on industrial production.