Investing.com - The euro was trading near eight-month highs against the U.S. dollar on Thursday, as political developments in Italy continued to support demand for the single currency, while the government shutdown in the U.S. still weighed on the greenback.
EUR/USD hit 1.3623 during late Asian trade, the pair's highest since early February; the pair subsequently consolidated at 1.3598, adding 0.14%.
The pair was likely to find support at 1.3506, Wednesday's low and resistance at 1.3658, the high of February 4.
The euro remained supported after Italian Prime Minister Enrico Letta survived a vote of confidence in parliament on Wednesday, after Silvio Berlusconi dropped his opposition to the coalition, in a surprise U-turn after announcing Saturday that he was pulling his ministers out of the government.
In addition, European Central Bank President Mario Draghi said Wednesday that risks to the euro zone economy remained to the downside, before reiterating that bank rates would remain at current or lower levels for an “extended period of time”, given the subdued inflation outlook and low levels of growth in the region.
Draghi also reiterated that the ECB remains ready to extend a third round of ultra-cheap loans to banks, in order to safeguard the recovery.
Meanwhile, the dollar weakened amid fears that the U.S. government shutdown would curb the economic recovery and prompt the Federal Reserve to maintain its stimulus program for longer.
President Barack Obama met with Republican and Democratic leaders in Congress on Wednesday, although a solution still seemed unlikely.
Markets were also considering how the political deadlock in Washington will impact negotiations to raise the U.S. debt ceiling, which the U.S. Treasury Department has estimated will be reached by October 17.
The euro was higher against the pound with EUR/GBP edging up 0.19%, to hit 0.8385.
Later in the day, the U.S. was to release the weekly government report on initial jobless claims along with data on factory orders. Meanwhile, the ISM was to produce a report on non-manufacturing activity.
EUR/USD hit 1.3623 during late Asian trade, the pair's highest since early February; the pair subsequently consolidated at 1.3598, adding 0.14%.
The pair was likely to find support at 1.3506, Wednesday's low and resistance at 1.3658, the high of February 4.
The euro remained supported after Italian Prime Minister Enrico Letta survived a vote of confidence in parliament on Wednesday, after Silvio Berlusconi dropped his opposition to the coalition, in a surprise U-turn after announcing Saturday that he was pulling his ministers out of the government.
In addition, European Central Bank President Mario Draghi said Wednesday that risks to the euro zone economy remained to the downside, before reiterating that bank rates would remain at current or lower levels for an “extended period of time”, given the subdued inflation outlook and low levels of growth in the region.
Draghi also reiterated that the ECB remains ready to extend a third round of ultra-cheap loans to banks, in order to safeguard the recovery.
Meanwhile, the dollar weakened amid fears that the U.S. government shutdown would curb the economic recovery and prompt the Federal Reserve to maintain its stimulus program for longer.
President Barack Obama met with Republican and Democratic leaders in Congress on Wednesday, although a solution still seemed unlikely.
Markets were also considering how the political deadlock in Washington will impact negotiations to raise the U.S. debt ceiling, which the U.S. Treasury Department has estimated will be reached by October 17.
The euro was higher against the pound with EUR/GBP edging up 0.19%, to hit 0.8385.
Later in the day, the U.S. was to release the weekly government report on initial jobless claims along with data on factory orders. Meanwhile, the ISM was to produce a report on non-manufacturing activity.