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Forex - Euro higher against softer dollar

Published 11/26/2013, 07:56 AM
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Investing.com - The euro was higher against the softer dollar on Tuesday, as investors looked ahead to U.S. data on the housing sector and consumer confidence later in the session.

EUR/USD was up 0.23% to 1.3546 during European afternoon trade, from 1.3515 on Monday.

The pair was likely to find support at 1.3489, Monday’s low and resistance at 1.3590.

The euro shrugged off dovish remarks by European Central Bank board member Benoit Coeure, who said Tuesday that negative deposit rates are still a possibility.

Investors were turning their attention to preliminary euro zone inflation data, due out on Friday, amid expectations that the annual rate of inflation would rise to 0.8% in November, from October’s four year low of 0.7%.

The slowdown in euro zone inflation last month prompted the ECB to cut interest rates to a record low 0.25% at its November meeting.

The euro was steady against the yen, with EUR/JPY dipping 0.02% to 137.39, holding below the four-year high of 137.94 struck on Monday.

The yen remained under pressure amid heightened expectations that the Bank of Japan will implement further stimulus measures next year.

The yen found some support after Tuesday’s minutes of the BoJ’s October meeting showed some policymakers see a greater downside risk to the economy.

The BoJ noted that the economy is following the path to the bank’s 2% inflation target at a moderate pace. The members also said that there remains a high degree of uncertainty over the medium to long term inflation outlook.

Elsewhere, the euro pushed higher against the pound, with EUR/GBP easing up 0.12% to 0.8377.

Bank of England Governor Mark Carney reiterated on Tuesday that the bank’s 7% target for unemployment was a threshold at which the bank would consider raising interest rates and not an automatic trigger for rate hikes.

The comments came during testimony on the BoE’s quarterly inflation report before parliament’s Treasury committee.





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