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Forex - Euro holds gains vs. dollar as U.S. debt fears weigh

Published 07/26/2011, 07:14 AM
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Investing.com – The euro held gains against the U.S. dollar on Tuesday, trading close to a three-week high as fears over a U.S. default mounted as talks about raising the U.S. debt ceiling remained deadlocked.

EUR/USD hit 1.4522 during European early afternoon trade, the pair’s highest since July 5; the pair subsequently consolidated at 1.4476, climbing 0.69%.

The pair was likely to find support at 1.4324, Monday’s low and short-term resistance at 1.4552, the high of July 5.

In an address from the White House on Monday, President Obama called on Republican and Democratic leaders to reach a fair compromise on raising the USD14.3 trillion debt ceiling, in order to avert a "reckless and irresponsible" national default ahead of the August 2 deadline.

Separately, House Speaker John Boehner said the president wanted “a blank check” to continue spending.

But the euro’s gains were limited after a report showed that Germany's consumer climate outlook for August declined unexpectedly, with decreases in both economic and income expectations, amid concerns over the ongoing debt crisis in the euro zone.

Meanwhile, the euro dipped against the pound, with EUR/GBP slipping 0.04% to hit 0.8829.

Later in the day, the U.S. was to publish government data on new home sales, as well as data on consumer confidence and house price inflation.   


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