Forexpros – The euro edged higher against the U.S. dollar on Thursday, after the Federal Reserve pushed back expectations for a likely interest rate increase until late 2014, in a more dovish-than-expected monetary policy statement.
EUR/USD hit 1.3134 during late Asian trade, the pair’s highest since December 21; the pair subsequently consolidated at 1.3112, easing up 0.05%.
The pair was likely to find support at 1.2952, Tuesday’s low and resistance at 1.3197, the high of December 21.
At the conclusion of Wednesday’s policy-setting meeting, the Fed said economic conditions will likely “warrant exceptionally low levels for the federal funds rate at least through late 2014.” The central bank had previously pledged to keep interest rates close to zero until mid-2013.
The Fed also revised down its forecast for economic growth this year to a range of between 2.2% and 2.7%, from a range of 2.5% to 2.9% in November.
Fed Chairman Ben Bernanke also said that “there is a case for additional policy action,” signaling that the bank may embark on a third round of quantitative easing.
In the euro zone, talks on a debt swap deal between Greece and its creditors were to resume in Athens later in the day.
Also Thursday, a report showed that German consumer climate improved in January.
The Gfk consumer climate index climbed to 5.9 this month, from an upwardly revised 5.7 in December, slightly better than expectations for an increase to 5.6.
The euro was almost unchanged against the pound, with EUR/GBP inching up 0.01% to hit 0.8373.
Later in the day, the U.S. was to release official data on initial jobless claims as well as a report on durable goods orders.
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