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Forex - Euro higher vs. dollar as U.S. default averted

Published 10/17/2013, 02:34 AM
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Investing.com - The euro was higher against the broadly weaker dollar on Thursday after the U.S. Congress passed a bill to reopen the government and raise the debt ceiling, just hours ahead of a deadline to avert a debt default.

EUR/USD hit 1.3564 during late Asian trade, the session high; the pair subsequently consolidated at 1.3562, gaining 0.21%.

The pair was likely to find support at 1.3500 and resistance at 1.3631, the high of October 4.

The dollar initially gained ground against the other major currencies amid relief over the last minute deal to avert an unprecedented U.S. sovereign debt default.

The deal will fund the government until January 15 and raise the government borrowing limit until February 7. Both sides also agreed to talks over broad budget issues in an attempt to reach a longer-term deal by December 13.

The agreement came with just hours to spare before the deadline to raise the USD16.7 trillion debt ceiling.

President Barack Obama signed the bill into law early on Thursday morning and pledged to begin reopening the government "immediately."

Investors remained concerned over the economic impact of the government shutdown and the possibility of another debt crisis, as the temporary solution does not resolve the underlying budgetary issues dividing Republicans and Democrats.

Elsewhere, the euro dipped against the pound, with EUR/GBP inching down 0.07% to 0.8477 and was lower against the yen, with EUR/JPY sliding 0.19% to 133.40.

The U.S. was to publish a report on initial jobless claims and the Philly Fed manufacturing index later Thursday.



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