Forex- EUR/USD surges to 6-day high after G20 boosts risk

Published 10/25/2010, 03:30 AM
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Investing.com – The euro was up against the U.S. dollar on Monday, surging to a 6-day high after the weekend G20 agreement on the need to avoid "competitive devaluation" of currencies boosted risk appetite.

EUR/USD hit 1.4080 during late Asian trade, the pair’s highest since October 15; the pair subsequently consolidated at 1.4053, surging 0.70%.

The pair was likely to find support at 1.3857, Friday’s low and resistance at 1.4157, the high of October 15 and an 8-month high.

At their weekend meeting in South Korea the G20 industrial and emerging nations agreed to try to maintain trade balances—which are both a reflection of and a determinant of exchange rates—at "sustainable levels." Leaders also agreed to move toward market-based exchange-rate systems.

G20 finance ministers also struck a surprise deal to give emerging nations a bigger voice in the International Monetary Fund, acknowledging the shift in economic power away from Western industrial nations.

The euro was also up against the pound, with EUR/GBP gaining 0.37% to hit 0.8929.

Later in the day, the euro zone was to release official data on industrial new orders while the U.S. was to publish industry data on existing home sales.

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