Forex – EUR/USD rises on Ireland budget hopes

Published 12/07/2010, 02:33 AM
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Investing.com – The euro was up against the U.S. dollar on Tuesday, rising to a daily high amid hopes that Ireland’s parliament would pass an austerity budget later in the day.

EUR/USD hit 1.3354 during late Asian trade, the daily high; the pair subsequently consolidated at 1.3316, gaining 0.06%.

The pair was likely to find short-term support at 1.3192, last Friday’s low and resistance at 1.3437, Friday’s high.

At a meeting in Brussels on Monday, European finance ministers ruled out immediate aid for Portugal and Spain or an increase in the EUR750 billion bailout fund, saying the existing credit line was enough to defend them in an emergency.

“The best defense against contagion is to improve our budgetary positions to meet the agreed fiscal targets,” EU Economic and Monetary Commissioner Olli Rehn said. “The recovery is taking hold and is progressing but at the same time it is essential that we contain the financial bush fires so they will not turn into a Europe-wide forest fire.”

Meanwhile, the euro was also down against the pound, with EUR/GBP shedding 0.17% to hit 0.8452.

Late Monday, Irish media outlets reported that that the Irish budget was likely to pass by two votes. The budget must pass for Ireland to access the EUR85 billion aid package it sought from the European Union and the International Monetary Fund.

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