Investing.com - The euro held gains against the U.S. dollar on Wednesday, but further upside looked likely to remain limited as uncertainty over the debt crisis in the single currency bloc weighed.
EUR/USD hit 1.2845 during European early afternoon trade, the pair’s highest since January 13; the pair subsequently consolidated at 1.2816, gaining 0.62%.
The pair was likely to find support at 1.2648, Tuesday’s low and resistance at 1.2844, the high of January 12.
The euro was buoyed following media reports that the International Monetary Fund wants to reach an agreement on enlarging its lending capacity to USD1 trillion, from the existing USD385 billion, at a meeting of the Group of 20 nations due to take place at the end of February.
The single currency also found support after an auction of Portuguese government debt met with solid investor demand and lower yields earlier.
But investors remained jittery after Fitch’s flagged a potential two-notch downgrade for Italy.
The comments came after the ratings agency, which currently holds Italy at an A+ rating, said last week that there was a “significant” chance that Italy would be downgraded by the end of January.
Meanwhile, Greek Prime Minister Lucas Papademos was due to resume talks with bond holders to discuss a voluntary write-down on Greece’s sovereign debt, after talks broke down last week, amid disagreements over how much money investors will lose by swapping their bonds.
The euro was also higher against the pound, with EUR/GBP gaining 0.35% to hit 0.8335.
Investors were also looking ahead to U.S. data on producer price inflation and industrial production later in the day.
EUR/USD hit 1.2845 during European early afternoon trade, the pair’s highest since January 13; the pair subsequently consolidated at 1.2816, gaining 0.62%.
The pair was likely to find support at 1.2648, Tuesday’s low and resistance at 1.2844, the high of January 12.
The euro was buoyed following media reports that the International Monetary Fund wants to reach an agreement on enlarging its lending capacity to USD1 trillion, from the existing USD385 billion, at a meeting of the Group of 20 nations due to take place at the end of February.
The single currency also found support after an auction of Portuguese government debt met with solid investor demand and lower yields earlier.
But investors remained jittery after Fitch’s flagged a potential two-notch downgrade for Italy.
The comments came after the ratings agency, which currently holds Italy at an A+ rating, said last week that there was a “significant” chance that Italy would be downgraded by the end of January.
Meanwhile, Greek Prime Minister Lucas Papademos was due to resume talks with bond holders to discuss a voluntary write-down on Greece’s sovereign debt, after talks broke down last week, amid disagreements over how much money investors will lose by swapping their bonds.
The euro was also higher against the pound, with EUR/GBP gaining 0.35% to hit 0.8335.
Investors were also looking ahead to U.S. data on producer price inflation and industrial production later in the day.