Forex - EUR/USD inches up after dollar rally cools

Published 03/28/2012, 07:45 PM
Updated 03/28/2012, 07:46 PM
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Investing.com - The euro gained against the dollar on Thursday as the greenback eased off an earlier rally that began on reports that U.S. orders for durable goods came in weaker than expected last month, which sent investors racing to the U.S. currency in flight to safety.

In Asian trading on Thursday, EUR/USD hit 1.3319, up 0.02%, up from a session low of 1.3313 and off from a high of 1.3322.

The pair was likely to find support at 1.3192, Monday's low and resistance at 1.3386, Tuesday's high.

In the U.S., the Commerce Department reported durable goods orders increased 2.2% in February, not enough to fully reverse January's revised 3.6% decline.

The number also failed to meet expectations for a 3.0% increase.

The news stoked fears that first-quarter gross domestic product growth figures will disappoint, especially on the heels of repeatedly less-than-stellar numbers out of the housing sector as well as comments from Federal Reserve Chairman Ben Bernanke, who has said headwinds still face the economy.

While Bernanke's comments in the past have weakened the dollar on sentiment the Federal Reserve is ready to stimulate the economy via easing measures that boost liquidity levels in exchange for price and labor stability, investors ran to the greenback amid a climate of general uncertainty.

Meanwhile, German inflation figures came in line with expectations, rising 0.3% in February from January.

Eurozone officials appear set to increase the continent's bailout funds to between EUR700 billion and EUR900 billion later this month, which gave the euro room to inch up in Thursday trading even though much work remains for Europe to resolve its debt crisis.

The euro, meanwhile, was down slightly against the pound and up against the yen, with EUR/GBP trading down 0.01% at 0.8381 and EUR/JPY up 0.06% at 110.46.

On Thursday in the U.S., gross domestic product figures, initial jobless claims and results from the Federal Reserve Bank of Kansas City quarterly manufacturers' survey are due out.

Fed Chairman Ben Bernanke is due to make an appearance in public.

In Europe, German unemployment numbers will be released as will Spanish business confidence figures.

Results from a eurozone business and consumer confidence survey are due out as well.






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