Forex - EUR/USD rises on short covering

Published 01/09/2012, 07:32 PM
Updated 01/09/2012, 07:36 PM
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Investing.com - The euro firmed against the dollar Tuesday as investors snapped up the European currency to cover short positions as well as on sentiment that policymakers remained determined to resolve the debt crisis.

EUR/USD hit 1.2778 in early Asian Tuesday trading, up 0.10% and up from a session low of 1.2760 and off from a high of 1.2778.

The pair was likely to find support at 1.2667, Monday’s low, and resistance at 1.3077, Tuesday’s high.

In Europe on Monday, French President Nicolas Sarkozy and German Chancellor Angela Merkel expressed commitment to keep the currency zone intact and stressed Greece would not receive further aid without sticking with tough austerity measures and previous bond swap terms.

Meanwhile, Philippe Hildebrand resigned as chairman of the Swiss Central Bank due to a controversy stemming from a currency trade allegedly carried out by his wife just before the bank set a minimum exchange-rate limit on the franc against the euro.    

The news offset weaker-than-expected German industrial production figures, which contracted by 0.6% in November compared to expectations for a 0.5% decline.

Meanwhile, the euro was up against the pound and also against the yen, with EUR/GBP gaining 0.07% to 0.8264 and EUR/JPY rising 0.18% at 98.27.

In the U.K. later Tuesday, the British Retail Consortium is to release retail sales data.

The U.K. will also report on industry data on house price balance, a key gauge of housing inflation.

The eurozone will unveil figures on French industrial production, a leading indicator of economic health as well.

In the U.S., FOMC members John Williams and Sandra Pianalto are expected to speak.






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