Investing.com - The euro moved higher against the U.S. dollar in Asian trade Thursday, following the U.S. Federal Reserve’s decision to implement a USD400 billion debt-swap program in an effort to ward off economic recession.
EUR/USD hit 1.3601 in early Asian trade, the pair’s highest since Monday; the pair subsequently consolidated at 1.3582, rising 0.13%.
The pair was likely to find support at 1.3500, last Monday’s low, and resistance at 1.3882, last Friday’s high.
At the conclusion of its two-day Federal Open Market Committee Meeting Wednesday, the U.S. Federal Reserve said it would be replacing a portion of the short-term debt in its portfolio with longer-term Treasuries in a move known as “Operation Twist.”
The move was highly anticipated by the market and may lead to lower interest rates as well as avoid the resumption of its controversial money creation program.
“There are significant downside risks to the economic outlook, including strains in global financial markets,” the Fed said in a statement, with a reference to the ongoing debt crisis in the euro-zone.
The Fed voted to leave its benchmark interest rate at near zero through the middle of 2013, a rate that has been in place since December of 2008.
Global equity investors looking for more beyond the expected “twist” sent European shares lower in Wednesday’s session, with France’s CAC 40 falling 1.61% to 2,935.82, Britain’s FTSE 100 lost 1.4% to 5,3288.41, and Germany’s DAX surrendered 2.47% to end the session at 5,433.80.
Earlier Wednesday, the National Association of Realtors reported that sales of existing homes in the U.S. rose by 7.7% to a seasonally adjusted 5.03 million units in August, well above market expectations of a 1.7% gain.
The figures did little to spark buying enthusiasm on Wall Street. as the Dow Jones Industrial Average sank 2.49% to 11,124.84, the Nasdaq Composite Index fell 2.01% to 2,538.19, and the S&P 500 slumped 2.94% to close at 1,166.76.
Meanwhile, the euro was higher against both the British pound and the Japanese yen, with EUR/GBP up by 0.02% to hit 0.8759, and EUR/JPY adding 0.19% to hit 103.96.
The U.S. Department of Labor was due to release weekly figures on initial jobless claims later Thursday.