Investing.com - The euro hovered near two-year highs against the dollar on Wednesday after disappointing U.S. unemployment data released Tuesday convinced markets the Federal Reserve will keep its monthly monetary stimulus programs in place until possibly 2014.
In U.S. trading on Wednesday, EUR/USD was down 0.01% at 1.3780, up from a session low of 1.3742 and off from a high of 1.3793.
The pair was likely to find support at 1.3652, Monday's low, and resistance at 1.3794, the high from Nov. 11, 2011.
The dollar continued to come under selling pressure after the Department of Labor revealed on Tuesday that U.S. economy added 148,000 jobs in September, well below expectations for an increase of 180,000.
The previous month’s figure was revised up to a gain of 193,000 from a previously reported increase of 169,000.
July's figure was revised down to 89,000 from 104,000.
The unemployment rate ticked down to a four-and-a-half year low of 7.2% from 7.3% in August due in part to more people dropping out of the labor force.
The data kept expectations going strong that the Federal Reserve will continue stimulating the economy to boost job creation by buying assets each month, possibly well into 2014.
The Fed is currently purchasing USD85 billion in Treasury holdings and mortgage debt a month to boost the economy, a monetary policy tool known as quantitative easing that drives down interest rates to spur recovery and job creation, weakening the dollar in the process.
Elsewhere, investors sold euro positions for profits after the European Central Bank announced plans to submit banks to new stress tests next year.
The review is to run over the course of a year and conclude before the ECB assumes its supervisory role over the bloc’s banking sector at the end of 2014. The news sparked concerns over a revival of the crisis in the euro zone.
Concerns that China’s central bank would tighten monetary policy to help control inflation in the world’s second-largest economy also sent some investors chasing safe-haven dollar positions, which cooled the euro's advance.
Elsewhere, the euro was up against the pound and down against the yen, with EUR/GBP trading up 0.45% at 0.8526 and EUR/JPY trading down 0.82% at 134.11.
The yen saw particularly robust demand on rising Chinese money-market rates, a sign the financial sector may be anticipating China's central bank to tighten policy.
On Thursday, the euro zone is to release preliminary data on manufacturing and service sector activity, a leading indicator of economic health. Germany and France are also to release individual reports.
The U.S. is to release the weekly report on initial jobless claims as well as data on new home sales.
In U.S. trading on Wednesday, EUR/USD was down 0.01% at 1.3780, up from a session low of 1.3742 and off from a high of 1.3793.
The pair was likely to find support at 1.3652, Monday's low, and resistance at 1.3794, the high from Nov. 11, 2011.
The dollar continued to come under selling pressure after the Department of Labor revealed on Tuesday that U.S. economy added 148,000 jobs in September, well below expectations for an increase of 180,000.
The previous month’s figure was revised up to a gain of 193,000 from a previously reported increase of 169,000.
July's figure was revised down to 89,000 from 104,000.
The unemployment rate ticked down to a four-and-a-half year low of 7.2% from 7.3% in August due in part to more people dropping out of the labor force.
The data kept expectations going strong that the Federal Reserve will continue stimulating the economy to boost job creation by buying assets each month, possibly well into 2014.
The Fed is currently purchasing USD85 billion in Treasury holdings and mortgage debt a month to boost the economy, a monetary policy tool known as quantitative easing that drives down interest rates to spur recovery and job creation, weakening the dollar in the process.
Elsewhere, investors sold euro positions for profits after the European Central Bank announced plans to submit banks to new stress tests next year.
The review is to run over the course of a year and conclude before the ECB assumes its supervisory role over the bloc’s banking sector at the end of 2014. The news sparked concerns over a revival of the crisis in the euro zone.
Concerns that China’s central bank would tighten monetary policy to help control inflation in the world’s second-largest economy also sent some investors chasing safe-haven dollar positions, which cooled the euro's advance.
Elsewhere, the euro was up against the pound and down against the yen, with EUR/GBP trading up 0.45% at 0.8526 and EUR/JPY trading down 0.82% at 134.11.
The yen saw particularly robust demand on rising Chinese money-market rates, a sign the financial sector may be anticipating China's central bank to tighten policy.
On Thursday, the euro zone is to release preliminary data on manufacturing and service sector activity, a leading indicator of economic health. Germany and France are also to release individual reports.
The U.S. is to release the weekly report on initial jobless claims as well as data on new home sales.