Investing.com - The euro held steady close to five-month highs against the greenback on Monday after European Central Bank President Mario Draghi warned that the economic outlook for the euro zone remained “challenging”.
EUR/USD hit 1.3190 during U.S. morning trade, the pair’s highest since May 2; the pair subsequently consolidated at 1.3170, inching up 0.06%.
The pair was likely to find support at 1.3056, Friday’s low and resistance at 1.3240, the high of May 2.
In testimony to the European Parliament’s Committee on Economic and Monetary Affairs Draghi said that the economic environment in the euro zone was challenging and was likely to remain so for some time to come.
The dollar remained under pressure after the Federal Reserve announced new easing measures last week and said interest rates would remain close to zero as long as inflation forecasts remain near the bank’s 2% target and until the U.S. unemployment rate declines to 6.5% or less.
But investors remained cautious amid concerns over the U.S. fiscal cliff, approximately USD600 billion of automatic tax hikes and spending cuts due to take effect on January 1 which investors’ fears could derail the U.S. recovery, if lawmakers cannot reach an agreement.
The euro was lower against the pound, with EUR/GBP slipping 0.15% to 0.8125, but remained close to multi-month highs against the yen, with EUR/JPY up 0.27% to 110.18.
The yen weakened broadly Monday after a victory for Japan’s Liberal Democratic Party in elections on Sunday fuelled expectations for more aggressive easing steps by the Bank of Japan.
The greenback showed little reaction earlier after a report showed that the Empire State business conditions index declined to minus 8.1 in December from a reading of minus 5.2 the previous month, compared to expectations for a reading of minus 1.
EUR/USD hit 1.3190 during U.S. morning trade, the pair’s highest since May 2; the pair subsequently consolidated at 1.3170, inching up 0.06%.
The pair was likely to find support at 1.3056, Friday’s low and resistance at 1.3240, the high of May 2.
In testimony to the European Parliament’s Committee on Economic and Monetary Affairs Draghi said that the economic environment in the euro zone was challenging and was likely to remain so for some time to come.
The dollar remained under pressure after the Federal Reserve announced new easing measures last week and said interest rates would remain close to zero as long as inflation forecasts remain near the bank’s 2% target and until the U.S. unemployment rate declines to 6.5% or less.
But investors remained cautious amid concerns over the U.S. fiscal cliff, approximately USD600 billion of automatic tax hikes and spending cuts due to take effect on January 1 which investors’ fears could derail the U.S. recovery, if lawmakers cannot reach an agreement.
The euro was lower against the pound, with EUR/GBP slipping 0.15% to 0.8125, but remained close to multi-month highs against the yen, with EUR/JPY up 0.27% to 110.18.
The yen weakened broadly Monday after a victory for Japan’s Liberal Democratic Party in elections on Sunday fuelled expectations for more aggressive easing steps by the Bank of Japan.
The greenback showed little reaction earlier after a report showed that the Empire State business conditions index declined to minus 8.1 in December from a reading of minus 5.2 the previous month, compared to expectations for a reading of minus 1.