Investing.com - The euro remained higher against the U.S. dollar on Wednesday, trading close to a three-day high as market sentiment strengthened but the single currency remained vulnerable amid uncertainty over the outcome of talks aimed at restructuring Greece’s debt.
EUR/USD hit 1.2845 during U.S. morning trade, the pair’s highest since January 13; the pair subsequently consolidated at 1.2839, jumping 0.81%.
The pair was likely to find support at 1.2648, Tuesday’s low and resistance at 1.2844, the high of January 12.
The euro strengthened broadly following reports that the International Monetary Fund is looking at ways to enlarge its lending capacity to USD1 trillion, from the existing USD385 billion, to insulate the global economy from the effects of the financial crisis in the euro zone.
The single currency also found support after Reuters reported that an analyst at Fitch said the agency did not expect Italy to default.
The euro had weakened in early trade after Fitch’s flagged a potential two-notch downgrade for Italy.
Meanwhile, Greek Prime Minister Lucas Papademos was resuming talks with bond holders to discuss a voluntary write-down on Greece’s sovereign debt.
Greece needs to secure an agreement on restructuring its debt in order to access new bailout funds and avert a default when an EUR14.4 billion bond redemption comes due on March 20.
The euro was also higher against the pound, with EUR/GBP rising 0.23% to hit 0.8326.
Also Wednesday, U.S. data showed that producer price inflation declined by a seasonally adjusted 0.1% in December, confounding expectations for a 0.1% gain.
Core PPI, which excludes the volatile food and energy categories, rose 0.3% last month, taking the annualized rate to 3.0%, the fastest increase since mid-2009.
A separate report showed that industrial production in the U.S. rose less-than-expected in December, while the previous month’s figure was downwardly revised to show a bigger decline.
EUR/USD hit 1.2845 during U.S. morning trade, the pair’s highest since January 13; the pair subsequently consolidated at 1.2839, jumping 0.81%.
The pair was likely to find support at 1.2648, Tuesday’s low and resistance at 1.2844, the high of January 12.
The euro strengthened broadly following reports that the International Monetary Fund is looking at ways to enlarge its lending capacity to USD1 trillion, from the existing USD385 billion, to insulate the global economy from the effects of the financial crisis in the euro zone.
The single currency also found support after Reuters reported that an analyst at Fitch said the agency did not expect Italy to default.
The euro had weakened in early trade after Fitch’s flagged a potential two-notch downgrade for Italy.
Meanwhile, Greek Prime Minister Lucas Papademos was resuming talks with bond holders to discuss a voluntary write-down on Greece’s sovereign debt.
Greece needs to secure an agreement on restructuring its debt in order to access new bailout funds and avert a default when an EUR14.4 billion bond redemption comes due on March 20.
The euro was also higher against the pound, with EUR/GBP rising 0.23% to hit 0.8326.
Also Wednesday, U.S. data showed that producer price inflation declined by a seasonally adjusted 0.1% in December, confounding expectations for a 0.1% gain.
Core PPI, which excludes the volatile food and energy categories, rose 0.3% last month, taking the annualized rate to 3.0%, the fastest increase since mid-2009.
A separate report showed that industrial production in the U.S. rose less-than-expected in December, while the previous month’s figure was downwardly revised to show a bigger decline.