Investing.com - The euro pulled away from lows against the dollar on Wednesday as investors waited to see if the Federal Reserve would decide to scale back its asset purchase program at its final policy meeting of the year.
EUR/USD touched session lows of 1.3732 and was last down 0.05% to 1.3758.
The pair was likely to find support at 1.3722, Tuesday’s low and resistance at 1.3781, Tuesday’s high.
Investors remained wary ahead of the outcome of the Fed’s policy meeting, with some expecting the bank to announce a small reduction in the pace of its USD85 billion-a-month asset purchase program.
However, many believe that the bank will wait until early next year to start rolling back stimulus, despite recent indications the U.S. economic recovery is deepening.
Data released on Wednesday showed that U.S. housing starts rose to the highest level in nearly six years in November.
U.S. housing starts rose to 1.09 million units, the Commerce Department said, from 0.89 million in October, compared to expectations for an increase to 0.95 million units.
Building permits in the U.S. fell 3.1% to 1.01 million units in November, from 1.04 million units the previous month. Analysts had expected building permits to drop 4.7% last month to 0.99 million units.
In the euro zone, a report showed that the Ifo German business climate index rose to a 20-month high of 109.5 in December, in line with forecasts and up from 109.3 in November.
The euro was sharply lower against the pound, with EUR/GBP dropping 0.88% to one week lows of 0.8389.
Sterling strengthened across the board after data on Wednesday showed that the U.K. unemployment rate unexpectedly fell to a four-and-a-half year low in October, fuelling hopes that the Bank of England will raise interest rates ahead of other central banks.
The Office for National Statistics said the U.K. unemployment rate fell to 7.4% in the three months to October, the lowest level since April 2009. Economists had expected the jobless rate to remain unchanged at 7.6%.
Meanwhile, the minutes of the BoE’s December meeting said further significant gains in sterling could put the U.K. economic recovery at risk.
Elsewhere, the dollar moved higher against the yen. USD/JPY hit session highs of 103.20 and was last up 0.45% to 103.11, holding below the five year peaks of 103.91 struck on Friday.
EUR/USD touched session lows of 1.3732 and was last down 0.05% to 1.3758.
The pair was likely to find support at 1.3722, Tuesday’s low and resistance at 1.3781, Tuesday’s high.
Investors remained wary ahead of the outcome of the Fed’s policy meeting, with some expecting the bank to announce a small reduction in the pace of its USD85 billion-a-month asset purchase program.
However, many believe that the bank will wait until early next year to start rolling back stimulus, despite recent indications the U.S. economic recovery is deepening.
Data released on Wednesday showed that U.S. housing starts rose to the highest level in nearly six years in November.
U.S. housing starts rose to 1.09 million units, the Commerce Department said, from 0.89 million in October, compared to expectations for an increase to 0.95 million units.
Building permits in the U.S. fell 3.1% to 1.01 million units in November, from 1.04 million units the previous month. Analysts had expected building permits to drop 4.7% last month to 0.99 million units.
In the euro zone, a report showed that the Ifo German business climate index rose to a 20-month high of 109.5 in December, in line with forecasts and up from 109.3 in November.
The euro was sharply lower against the pound, with EUR/GBP dropping 0.88% to one week lows of 0.8389.
Sterling strengthened across the board after data on Wednesday showed that the U.K. unemployment rate unexpectedly fell to a four-and-a-half year low in October, fuelling hopes that the Bank of England will raise interest rates ahead of other central banks.
The Office for National Statistics said the U.K. unemployment rate fell to 7.4% in the three months to October, the lowest level since April 2009. Economists had expected the jobless rate to remain unchanged at 7.6%.
Meanwhile, the minutes of the BoE’s December meeting said further significant gains in sterling could put the U.K. economic recovery at risk.
Elsewhere, the dollar moved higher against the yen. USD/JPY hit session highs of 103.20 and was last up 0.45% to 103.11, holding below the five year peaks of 103.91 struck on Friday.