Investing.com – The euro extended earlier gains against the U.S. dollar on Tuesday, pushing to an 8-month high, after the Bank of Japan’s decision to begin fresh monetary easing fanned fears that the Federal Reserve would follow suit.
EUR/USD hit 1.3850 during European afternoon trade, the pair’s highest since February 4; the pair subsequently consolidated at 1.3832, jumping 1.08%.
The pair was likely to find support at 1.3618, the low of Octobere 1 and resistance at 1.4025, the high of February 3.
The Bank of Japan's decision earlier Tuesday to cut interest rates to near zero and embark on a monetary easing program weakened confidence in currencies, resulting in the dollar coming under broad selling pressure.
The decision also exacerbated fears that the Fed would implement further quantitative easing in the coming months. On Monday, while addressing a forum, Fed chair Ben Bernanke said that that the central bank’s first round of large-scale asset purchases improved the economy and that further buying will probably help more.
The euro was also up against the pound, with EUR/GBP gaining 0.56% to hit 0.8693.
Also Tuesday, the U.S. Institute of Supply Management said its non-manufacturing purchasing manager's index rose to 53.2 in September, after falling to 51.5 in August. Analysts had expected the index to advance to 51.8 in September.
EUR/USD hit 1.3850 during European afternoon trade, the pair’s highest since February 4; the pair subsequently consolidated at 1.3832, jumping 1.08%.
The pair was likely to find support at 1.3618, the low of Octobere 1 and resistance at 1.4025, the high of February 3.
The Bank of Japan's decision earlier Tuesday to cut interest rates to near zero and embark on a monetary easing program weakened confidence in currencies, resulting in the dollar coming under broad selling pressure.
The decision also exacerbated fears that the Fed would implement further quantitative easing in the coming months. On Monday, while addressing a forum, Fed chair Ben Bernanke said that that the central bank’s first round of large-scale asset purchases improved the economy and that further buying will probably help more.
The euro was also up against the pound, with EUR/GBP gaining 0.56% to hit 0.8693.
Also Tuesday, the U.S. Institute of Supply Management said its non-manufacturing purchasing manager's index rose to 53.2 in September, after falling to 51.5 in August. Analysts had expected the index to advance to 51.8 in September.