Investing.com - The euro rose to a fresh four-month high against the U.S. dollar on Wednesday, after Germany’s constitutional court approved the country’s participation in the euro zone’s new bailout fund, the European Stability Mechanism.
EUR/USD hit 1.2900 during European morning trade, the pair’s highest since May 14; the pair subsequently consolidated at 1.2885, gaining 0.23%.
The pair was likely to find support at 1.2753, Tuesday’s low and resistance at 1.2956, the high of May 11.
The ruling cleared the way for Germany’s president to ratify the ESM under certain conditions, allowing the European Central Bank’s bond purchasing program to proceed.
The German court said that the country’s liability to the EMS must not exceed EUR190 billion without the approval of the lower house of parliament and said that both houses of parliament must be kept informed about decisions relating to the ESM.
The greenback remained under broad selling pressure amid speculation that the U.S. Federal Reserve may implement a third round of quantitative easing after its upcoming policy meeting, which concludes on Thursday.
Sentiment on the greenback was also hit after ratings agency Moody’s warned Tuesday that it could downgrade the U.S’s triple-A rating if budget negotiations for 2013 do not result in policy measures which will reduce the country’s debt.
The euro was little changed against the pound, with EUR/GBP dipping 0.04% 0.7996, but pushed higher against the yen, with EUR/JPY rising 0.27% to 100.21.
Elsewhere, official data showed that Italian industrial production fell 0.2% in August, compared to expectations for a 0.5% decline, after a 1.3% drop in July.
EUR/USD hit 1.2900 during European morning trade, the pair’s highest since May 14; the pair subsequently consolidated at 1.2885, gaining 0.23%.
The pair was likely to find support at 1.2753, Tuesday’s low and resistance at 1.2956, the high of May 11.
The ruling cleared the way for Germany’s president to ratify the ESM under certain conditions, allowing the European Central Bank’s bond purchasing program to proceed.
The German court said that the country’s liability to the EMS must not exceed EUR190 billion without the approval of the lower house of parliament and said that both houses of parliament must be kept informed about decisions relating to the ESM.
The greenback remained under broad selling pressure amid speculation that the U.S. Federal Reserve may implement a third round of quantitative easing after its upcoming policy meeting, which concludes on Thursday.
Sentiment on the greenback was also hit after ratings agency Moody’s warned Tuesday that it could downgrade the U.S’s triple-A rating if budget negotiations for 2013 do not result in policy measures which will reduce the country’s debt.
The euro was little changed against the pound, with EUR/GBP dipping 0.04% 0.7996, but pushed higher against the yen, with EUR/JPY rising 0.27% to 100.21.
Elsewhere, official data showed that Italian industrial production fell 0.2% in August, compared to expectations for a 0.5% decline, after a 1.3% drop in July.