Investing.com – The euro turned higher against the U.S. dollar on Monday, rebounding from a six-day low after European Central Bank President Jean-Claude Trichet reiterated his tough stance about inflation.
EUR/USD hit 1.4019 during European afternoon trade, the pair’s lowest since March 18; the pair subsequently clawed back to consolidate at 1.4108, gaining 0.16%.
The pair was likely to find support at 1.3979, the low of March 18 and resistance at 1.4194, Friday’s high.
Earlier in the day, ECB President Jean-Claude Trichet said inflation rates remained “durably” above its price stability target, reinforcing expectations the central bank would raise interest rates as early as April.
The remarks follow hawkish comments made by ECB governing board member Ewald Nowotny on Sunday, who said the central bank wanted to move towards a more "normal" monetary policy despite recent events in Japan.
The euro was pressured earlier after German Chancellor Angela Merkel's conservative party suffered a loss in elections in the key state of Baden-Wuerttemberg over the weekend.
The loss of the regional stronghold could limit Merkel's ability to pass legislation as her coalition centre-right government deals with nuclear power, military action in Libya and the ongoing euro zone debt crisis.
Elsewhere, the euro was up against the pound, with EUR/GBP climbing 0.19% to hit 0.8799.
Earlier in the day, a report from the U.S. Bureau of Economic Analysis showed that U.S. consumer spending rose more-than-expected in February, climbing by a seasonally adjusted 0.7%, surpassing expectations of a 0.5% gain.
The report also showed that personal income rose by 0.3%, while the core personal consumption expenditure index rose in line with expectations, adding 0.2%.
Also Monday, the National Association of Realtors said its pending home sales index jumped by 2.1% in February, after tumbling by 2.8% in January and exceeding expectations for a rise of 0.3%.
EUR/USD hit 1.4019 during European afternoon trade, the pair’s lowest since March 18; the pair subsequently clawed back to consolidate at 1.4108, gaining 0.16%.
The pair was likely to find support at 1.3979, the low of March 18 and resistance at 1.4194, Friday’s high.
Earlier in the day, ECB President Jean-Claude Trichet said inflation rates remained “durably” above its price stability target, reinforcing expectations the central bank would raise interest rates as early as April.
The remarks follow hawkish comments made by ECB governing board member Ewald Nowotny on Sunday, who said the central bank wanted to move towards a more "normal" monetary policy despite recent events in Japan.
The euro was pressured earlier after German Chancellor Angela Merkel's conservative party suffered a loss in elections in the key state of Baden-Wuerttemberg over the weekend.
The loss of the regional stronghold could limit Merkel's ability to pass legislation as her coalition centre-right government deals with nuclear power, military action in Libya and the ongoing euro zone debt crisis.
Elsewhere, the euro was up against the pound, with EUR/GBP climbing 0.19% to hit 0.8799.
Earlier in the day, a report from the U.S. Bureau of Economic Analysis showed that U.S. consumer spending rose more-than-expected in February, climbing by a seasonally adjusted 0.7%, surpassing expectations of a 0.5% gain.
The report also showed that personal income rose by 0.3%, while the core personal consumption expenditure index rose in line with expectations, adding 0.2%.
Also Monday, the National Association of Realtors said its pending home sales index jumped by 2.1% in February, after tumbling by 2.8% in January and exceeding expectations for a rise of 0.3%.