Investing.com - The euro firmed against the dollar on Wednesday as investors avoided the greenback due to uncertainty over whether or not the Federal Reserve next week will announce plans to taper its USD85 billion in monthly bond purchases.
In U.S. trading on Wednesday, EUR/USD was up 0.27% at 1.3798, up from a session low of 1.3742 and off from a high of 1.3801.
The pair was likely to find support at 1.3695, Monday's low, and resistance at 1.3818, the high from Oct. 28.
Better-than-expected data out of the U.S. labor market rekindled expectations for some that the Federal Reserve may announce plans to begin tapering monthly asset purchases at its Dec. 17-18 policy meeting, especially with a budget deal in the U.S. Congress that could do away with fiscal uncertainties and speed up recovery.
Stimulus tools such as Fed bond purchases aim to fuel recovery by driving down interest rates, weakening the dollar in the process.
Other investors still bet the Fed will hold off until early 2014 before making changes to its monthly bond-buying program, which softened the dollar on Wednesday.
Elsewhere, Germany's consumer price index edged up 0.2% in November from October and up 1.3% on year, both figures in line with expectations.
The euro continued to enjoy demand stemming from the European Central Bank's decision to hold off on rolling out new stimulus measures at its most recent policy meeting.
The euro also saw support after European Union finance ministers moved closer to an agreement on a European banking union on Tuesday, a measure which is seen as key in fending off a repeat of the region’s financial crisis.
The single currency was up against the pound and down against the yen, with EUR/GBP trading up 0.59% at 0.8417 and EUR/JPY trading down 0.21% at 141.23.
On Thursday, ECB President Mario Draghi is to speak in the European Parliament in Strasbourg; his comments will be closely watched.
The ECB is to publish its monthly bulletin, while the euro zone is to release data on industrial production.
The U.S. is to produce data on retail sales as well as the weekly report on initial jobless claims.
In U.S. trading on Wednesday, EUR/USD was up 0.27% at 1.3798, up from a session low of 1.3742 and off from a high of 1.3801.
The pair was likely to find support at 1.3695, Monday's low, and resistance at 1.3818, the high from Oct. 28.
Better-than-expected data out of the U.S. labor market rekindled expectations for some that the Federal Reserve may announce plans to begin tapering monthly asset purchases at its Dec. 17-18 policy meeting, especially with a budget deal in the U.S. Congress that could do away with fiscal uncertainties and speed up recovery.
Stimulus tools such as Fed bond purchases aim to fuel recovery by driving down interest rates, weakening the dollar in the process.
Other investors still bet the Fed will hold off until early 2014 before making changes to its monthly bond-buying program, which softened the dollar on Wednesday.
Elsewhere, Germany's consumer price index edged up 0.2% in November from October and up 1.3% on year, both figures in line with expectations.
The euro continued to enjoy demand stemming from the European Central Bank's decision to hold off on rolling out new stimulus measures at its most recent policy meeting.
The euro also saw support after European Union finance ministers moved closer to an agreement on a European banking union on Tuesday, a measure which is seen as key in fending off a repeat of the region’s financial crisis.
The single currency was up against the pound and down against the yen, with EUR/GBP trading up 0.59% at 0.8417 and EUR/JPY trading down 0.21% at 141.23.
On Thursday, ECB President Mario Draghi is to speak in the European Parliament in Strasbourg; his comments will be closely watched.
The ECB is to publish its monthly bulletin, while the euro zone is to release data on industrial production.
The U.S. is to produce data on retail sales as well as the weekly report on initial jobless claims.