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Forex - EUR/USD weakens, but losses seen limited

Published 06/20/2014, 09:50 AM
Euro slips lower against dollar
EUR/USD
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EUR/GBP
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Investing.com - The euro slipped lower against the U.S. dollar on Friday, but losses were expected to remain limited as the Federal Reserve's most recent policy statement continued to dampen demand for the greenback.

EUR/USD hit 1.3564 during U.S. morning trade, the pair's lowest since June 18; the pair subsequently consolidated at 1.3580, shedding 0.21%.

The pair was likely to find support at 1.3536, the low of June 17 and resistance at 1.3668, the high of June 9.

The dollar remained under pressure after the Fed gave no indication of when interest rates could start to rise at the conclusion of its two-day meeting on Wednesday. In addition, the Fed’s forecast of where interest rates might reach in the long term fell from 4% to 3.75%.

The central bank cut its bond purchases by $10 billion a month, to $35 billion, saying there was "sufficient underlying strength" in the U.S. economy to continue tapering.

In the euro zone, official data earlier showed that German producer price inflation fell 0.2% last month, compared to expectations for a 0.2% rise, after a 0.1% downtick in April.

The euro was lower against the pound, with EUR/GBP edging down 0.13% to 0.7974.

Also Friday, official data showed that U.K. public sector net borrowing rose to £11.48 billion in May, from a upwardly revised £9.00 billion the previous month. Analysts had expected public sector net borrowing to rise to £12.00 billion last month.

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