Forex - EUR/USD holds steady as hopes for Greek aid build

Published 11/18/2012, 08:16 PM
Updated 11/18/2012, 08:18 PM
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Investing.com - The euro traded steady to higher against the dollar on Monday as investors went long on the nicely priced single currency ahead of a Tuesday meeting of eurozone finance ministers that could lead to fresh bailout money flowing into Greek coffers.

In Asian trading on Monday, EUR/USD was trading down 0.41% at 1.2728, up from a session low of 1.2691, and off from a high of 1.2784.

The pair was likely to find support at 1.2662, Tuesday’s low, and resistance at 1.2801, Thursday’s high.

On Tuesday, eurozone finance ministers will meet to discuss unlocking Greece’s next tranche of aid.

Hopes European Union policymakers and the International Monetary Fund will disburse aid to crisis-weary Athens sent the pair gaining.

Disagreements over austerity and debt targets in the recent past has held up disbursement of rescue funding.

The dollar, meanwhile, saw demand stemming from fears tax hikes and spending cuts will pummel the U.S. economy cool somewhat.

At the end of this year, the Bush-era tax cuts and other tax benefits expire at the same time pre-programmed cuts to government spending are scheduled to take effect, a combination known as a fiscal cliff that could send the country into recession next year if left unaddressed by Congress.

If untreated, the fiscal cliff could siphon over USD600 billion out of the U.S. economy next year alone in the form of rising taxes and cuts to government spending.

Lawmakers have expressed confidence that they'll avoid partisan bickering and cut a deal, but uncertainty has sparked widespread dollar demand among investors seeking safe harbor in recent sessions.

The euro, meanwhile, was flat against the pound and up against the yen, with EUR/GBP trading down 0.01% at 0.8024, and EUR/JPY trading up 0.23% at 103.85.

Later Monday, the U.S. is to release industry data on existing home sales, a leading indicator of economic health.










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