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Forexpros – The euro moved fractionally higher against the U.S. dollar in Asian trade Friday, as hopes for a comprehensive plan to address Europe’s debt crisis hit a snag and regional leaders scheduled a second summit meeting for next week.
EUR/USD hit 1.3789 in early Asian trade, the day’s high; the pair subsequently consolidated at 1.3784, rising 0.03%.
The pair was likely to find support at 1.3583, last Wednesday’s low, and resistance at 1.3914, Monday’s high.
On Thursday, French President Nicolas Sarkozy and German Chancellor Angela Merkel issued a joint statement from Frankfurt, where the two agreed to meet Saturday in Brussels a day before the scheduled Sunday summit of European leaders.
Sunday’s confab in Brussels has become the focus of investor hopes since officials from the Group of 20 last weekend set the day as a deadline for Europe to devise a concerted action to boost the USD603 billion European Financial Stability Facility rescue fund.
The French and German leaders announced that a “comprehensive and ambitious” response to the debt crisis would emerge this weekend with a second meeting to take place no later than next Wednesday.
The EFSF’s role in containing regional debt contagion appeared to be at the forefront of negotiations, and at USD603 billion, some analysts have doubted whether the fund was large enough to rescue Greece and, potentially, Spain and Italy if necessary.
Meanwhile, Greek Prime Minister George Papandreou landed a major victory by securing a parliamentary vote approving a new round of austerity measured aimed at securing more financial aid and cooling Greek public unrest.
Earlier Thursday, the U.S. National Association of Realtors reported that sales of new homes fell less than expected in September to 4.1 million from 5.06 million the previous month. Economist forecasts had predicted a drop to 4.9 million for the period.
And a Thursday report from the Federal Reserve Bank of Philadelphia showed that manufacturing activity in the state grew in October to a seasonally adjusted 8.7, from minus 17.5 the month before.
Analysts had expected the index, widely viewed as a harbinger of national trends, to fall by 9.5 last month and the data represented the biggest one month turnaround in 31 years.
Wall Street stocks swayed between red and black for most of the day before settling mixed; The Dow Jones Industrial Average gained 0.32% to 11,541.80, the Nasdaq Composite Index fell 0.21% to 2,598.62 and the S&P 500 advanced 0.46% to close the day at 1,215.39.
European shares ended Thursday’s session sharply lower, with France’s CAC dropping 2.32% to 3,048.07, Britain’s FTSE 100 fell 1.21% to 5,384.68, while Germany’s DAX stumbled 2.49% to close at 5,766.48.
Meanwhile, the euro was lower against the British pound but up against the Japanese yen, with EUR/GBP down 0.03% to hit 0.8722, and EUR/JPY higher by 0.09% to hit 105.91.
Germany’s Ifo Institute for Economic Research was scheduled to release its latest survey of business sentiment later Friday.
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