Forex - EUR/USD rebounds from 11-day low as focus returns to Fed

Published 10/20/2010, 03:30 AM
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Investing.com – The euro was up against the U.S. dollar on Wednesday, rebounding from an 11-day low as focus turned back onto the prospect of further monetary easing by the Federal Reserve.

EUR/USD hit 1.3801 during late Asian trade, a daily high; the pair subsequently consolidated at 1.3792, gaining 0.46%.

The pair was likely to find support at 1.3636, the low of October 5 and resistance at 1.4155, last Friday’s high and a 10-month high.

On Tuesday, three regional Fed presidents reinforced that the central bank will begin a second round of asset purchases with two saying asset purchases must be big enough to aid the economy.

Chicago Fed president Charles Evans said the bank would need to buy securities on a large scale several times in order to temporarily to raise inflation. Meanwhile, Atlanta Fed president Denis Lockhart said that a rate of USD 100 billion of purchases per month is “in the range of numbers one might consider.”

The euro was also up against the pound, with EUR/GBP gaining 0.38% to hit 0.8775.

Later in the day, the Federal Reserve was to release its Beige Book, a summary of the data the bank examines before setting the benchmark interest rate.

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