Investing.com - The euro was off the highest levels of the day against the U.S. dollar on Thursday, but remained supported near a four-month high as investors looked ahead to a speech by Federal Reserve Chairman Ben Bernanke later in the day for more clarity on the central bank’s monetary policy.
EUR/USD hit 1.2931 during European afternoon trade, the daily high, before subsequently consolidating at 1.2910, gaining 0.09%.
The pair was likely to find support at 1.2816, the previous session’s low and near-term resistance at 1.2935, Wednesday’s high and the highest since May 11.
Market players eyed the outcome of the Fed’s two-day policy meeting later Thursday, amid growing speculation that the U.S. central bank may announce a third round of bond purchases, or quantitative easing, to boost sluggish growth in the world’s largest economy.
Market expectations of a QE3 announcement this week increased after last Friday’s weaker-than-expected jobs report and following a speech from Fed Chief Ben Bernanke at Jackson Hole last month.
Meanwhile, the euro found support after Italy saw borrowing costs collapse at an auction of government debt earlier in the day, reflecting growing optimism policymakers in the euro zone will do more to stem the region’s ongoing debt crisis.
The Rome-based treasury auctioned EUR4 billion worth of three-year government bonds at an average yield of 2.75%, down from 4.65% in August and the lowest since October 2010.
Italy also sold EUR1.5 billion of five-year debt at 3.71% and EUR1.5 billion of debt due in 2026 at 5.32%, the longest-maturity bonds sold this year.
The single currency also remained supported after Germany’s constitutional court approved the country’s participation in the euro zone’s bailout fund, the European Stability Mechanism on Wednesday.
Later in the day, the U.S. was to publish government data on producer price inflation, as well as a weekly report on initial jobless claims.
Elsewhere, the euro was mixed against the pound and the yen, with EUR/GBP easing up 0.07% 0.8015 and EUR/JPY dipping 0.13% to hit 100.31.
EUR/USD hit 1.2931 during European afternoon trade, the daily high, before subsequently consolidating at 1.2910, gaining 0.09%.
The pair was likely to find support at 1.2816, the previous session’s low and near-term resistance at 1.2935, Wednesday’s high and the highest since May 11.
Market players eyed the outcome of the Fed’s two-day policy meeting later Thursday, amid growing speculation that the U.S. central bank may announce a third round of bond purchases, or quantitative easing, to boost sluggish growth in the world’s largest economy.
Market expectations of a QE3 announcement this week increased after last Friday’s weaker-than-expected jobs report and following a speech from Fed Chief Ben Bernanke at Jackson Hole last month.
Meanwhile, the euro found support after Italy saw borrowing costs collapse at an auction of government debt earlier in the day, reflecting growing optimism policymakers in the euro zone will do more to stem the region’s ongoing debt crisis.
The Rome-based treasury auctioned EUR4 billion worth of three-year government bonds at an average yield of 2.75%, down from 4.65% in August and the lowest since October 2010.
Italy also sold EUR1.5 billion of five-year debt at 3.71% and EUR1.5 billion of debt due in 2026 at 5.32%, the longest-maturity bonds sold this year.
The single currency also remained supported after Germany’s constitutional court approved the country’s participation in the euro zone’s bailout fund, the European Stability Mechanism on Wednesday.
Later in the day, the U.S. was to publish government data on producer price inflation, as well as a weekly report on initial jobless claims.
Elsewhere, the euro was mixed against the pound and the yen, with EUR/GBP easing up 0.07% 0.8015 and EUR/JPY dipping 0.13% to hit 100.31.