Investing.com - The euro rose to a three-week high against the U.S. dollar on Monday, as dovish comments by Federal Reserve Chairman Ben Bernanke fanned concerns that the central bank may implement a third round of monetary easing.
EUR/USD hit 1.3339 during U.S. morning trade, the pair’s highest since March 1; the pair subsequently consolidated at 1.3324, gaining 0.40%.
The pair was likely to find support at 1.3191, the session low and short-term resistance at 1.3355, the high of March 1.
The greenback weakened against the euro after Fed Chairman Ben Bernanke said in a speech that further monetary accommodation is needed to bring about big gains in the U.S. jobs market, which he described as “far from normal,” despite a recent improvement.
The euro extended gains after an industry report showed that pending home sales in the U.S. declined unexpectedly in February, indicating that the recovery in the housing market remains uneven.
The National Association of Realtors said its pending home sales index fell by 0.5% last month, confounding expectations for a 1.0% gain. Pending home sales rose by 2.0% in January.
In the euro zone, German Chancellor Angela Merkel said earlier that Germany would be prepared to allow running the region’s two bailout funds in parallel, which would give a total fund of EUR700 billion to combat the debt crisis in the single currency bloc.
The euro also found support after a report showed that German business confidence improved in March.
The Ifo Institute said earlier that its index of German business confidence inched up to 109.8, from a reading of 109.6 in February. Analysts had expected the index to ease up to 109.7 this month.
However, investors remained cautious after Italian Prime Minister Mario Monti warned that the threat of contagion from Spain could cause the debt crisis in the euro zone to flare up again.
The euro was inched higher against the pound, with EUR/GBP easing up 0.07% to hit 0.8367 and posted strong gains against the yen, with EUR/JPY jumping 1.06% to hit 110.42.
Meanwhile, market participants were looking ahead to a speech by European Central Bank President Mario Draghi later in the day.
EUR/USD hit 1.3339 during U.S. morning trade, the pair’s highest since March 1; the pair subsequently consolidated at 1.3324, gaining 0.40%.
The pair was likely to find support at 1.3191, the session low and short-term resistance at 1.3355, the high of March 1.
The greenback weakened against the euro after Fed Chairman Ben Bernanke said in a speech that further monetary accommodation is needed to bring about big gains in the U.S. jobs market, which he described as “far from normal,” despite a recent improvement.
The euro extended gains after an industry report showed that pending home sales in the U.S. declined unexpectedly in February, indicating that the recovery in the housing market remains uneven.
The National Association of Realtors said its pending home sales index fell by 0.5% last month, confounding expectations for a 1.0% gain. Pending home sales rose by 2.0% in January.
In the euro zone, German Chancellor Angela Merkel said earlier that Germany would be prepared to allow running the region’s two bailout funds in parallel, which would give a total fund of EUR700 billion to combat the debt crisis in the single currency bloc.
The euro also found support after a report showed that German business confidence improved in March.
The Ifo Institute said earlier that its index of German business confidence inched up to 109.8, from a reading of 109.6 in February. Analysts had expected the index to ease up to 109.7 this month.
However, investors remained cautious after Italian Prime Minister Mario Monti warned that the threat of contagion from Spain could cause the debt crisis in the euro zone to flare up again.
The euro was inched higher against the pound, with EUR/GBP easing up 0.07% to hit 0.8367 and posted strong gains against the yen, with EUR/JPY jumping 1.06% to hit 110.42.
Meanwhile, market participants were looking ahead to a speech by European Central Bank President Mario Draghi later in the day.