Investing.com - The euro rose to fresh eight-month highs against the dollar on Wednesday after Italy’s prime minister survived a confidence vote, while comments by European Central Bank President Mario Draghi also boosted the single currency.
EUR/USD hit 1.3603 during European afternoon trade, the highest since early February; the pair subsequently consolidated at 1.3601, gaining 0.56%.
The pair was likely to find support at 1.3503, the session low and resistance at 1.3658, the high of February 4.
The euro found support after Italian Prime Minister Enrico Letta survived a vote of confidence in parliament on Wednesday, after Silvio Berlusconi dropped his opposition to the coalition, in a surprise U-turn after announcing Saturday that he was pulling his ministers out of the government.
The single currency was also boosted after Mario Draghi said ECB policymakers considered a rate cut, before leaving rates on hold at 0.5%.
Draghi said risks to the euro zone economy remain to the downside and that the bank viewed the recovery as “weak, fragile and uneven” before reiterating that bank rates would remain at current or lower levels for an “extended period of time”.
Draghi reiterated that the ECB remains ready to extend a third round of ultra-cheap loans to banks to safeguard the recovery.
Draghi also said the euro exchange rate is “not a policy target”, but it is important to growth and price stability, and added that the ECB was “attentive” to developments.
The dollar remained under pressure amid fears that the U.S. government shutdown would curb the economic recovery and prompt the Federal Reserve to maintain its stimulus program for longer.
Last month the U.S. central bank took markets by surprise with a decision to keep its stimulus program on track, saying it wanted to see more evidence of a sustained economic recovery before tapering.
Markets were also mulling over how the political deadlock in Washington will impact on negotiations to raise the U.S. debt ceiling, which the U.S. Treasury Department has estimated will be reached by October 17.
Data released on Wednesday showed that the U.S. private sector added fewer-than-expected jobs in September, clouding the outlook for the economic recovery.
Payroll processing firm ADP said non-farm private employment rose by a seasonally adjusted 166,000 in September, below expectations for an increase of 180,000.
The previous month’s figure was revised down to a gain of 159,000 from a previously reported increase of 176,000.
Elsewhere, the euro rose to session highs against the pound, with EUR/GBP up 0.25% to 0.8372 and pared losses against the yen, with EUR/JPY down 0.16% to 132.33 after falling as low as 131.43 earlier.
EUR/USD hit 1.3603 during European afternoon trade, the highest since early February; the pair subsequently consolidated at 1.3601, gaining 0.56%.
The pair was likely to find support at 1.3503, the session low and resistance at 1.3658, the high of February 4.
The euro found support after Italian Prime Minister Enrico Letta survived a vote of confidence in parliament on Wednesday, after Silvio Berlusconi dropped his opposition to the coalition, in a surprise U-turn after announcing Saturday that he was pulling his ministers out of the government.
The single currency was also boosted after Mario Draghi said ECB policymakers considered a rate cut, before leaving rates on hold at 0.5%.
Draghi said risks to the euro zone economy remain to the downside and that the bank viewed the recovery as “weak, fragile and uneven” before reiterating that bank rates would remain at current or lower levels for an “extended period of time”.
Draghi reiterated that the ECB remains ready to extend a third round of ultra-cheap loans to banks to safeguard the recovery.
Draghi also said the euro exchange rate is “not a policy target”, but it is important to growth and price stability, and added that the ECB was “attentive” to developments.
The dollar remained under pressure amid fears that the U.S. government shutdown would curb the economic recovery and prompt the Federal Reserve to maintain its stimulus program for longer.
Last month the U.S. central bank took markets by surprise with a decision to keep its stimulus program on track, saying it wanted to see more evidence of a sustained economic recovery before tapering.
Markets were also mulling over how the political deadlock in Washington will impact on negotiations to raise the U.S. debt ceiling, which the U.S. Treasury Department has estimated will be reached by October 17.
Data released on Wednesday showed that the U.S. private sector added fewer-than-expected jobs in September, clouding the outlook for the economic recovery.
Payroll processing firm ADP said non-farm private employment rose by a seasonally adjusted 166,000 in September, below expectations for an increase of 180,000.
The previous month’s figure was revised down to a gain of 159,000 from a previously reported increase of 176,000.
Elsewhere, the euro rose to session highs against the pound, with EUR/GBP up 0.25% to 0.8372 and pared losses against the yen, with EUR/JPY down 0.16% to 132.33 after falling as low as 131.43 earlier.