Forexpros – The euro was higher against the U.S. dollar on Wednesday, as overnight gains in U.S. stocks and media reports that European leaders have agreed a deal to enlarge the euro zone’s bailout fund boosted sentiment.
EUR/USD hit 1.3840 during late Asian trade, the pair’s highest since Monday; the pair subsequently consolidated at 1.3815, gaining 0.45%.
The pair was likely to find support at 1.3724, Monday’s low and resistance at 1.3913, Monday’s high and a one-month high.
A report in the Guardian newspaper on Tuesday said that Germany and France had agreed to augment the European Financial Stability Fund to EUR2 trillion ahead of a critical weekend European Union summit aimed at reaching a resolution to the debt crisis. The report was subsequently denied by EU officials.
However, concerns over the impact of the financial crisis remained in focus after ratings agency Moody’s downgraded Spain’s sovereign debt rating by two notches late Tuesday, citing high levels of debt in the banking and corporate sectors.
The announcement came one day after Moody’s placed France’s triple-A credit rating on review.
The euro was also higher against the pound, with EUR/GBP rising 0.12% to hit 0.8762.
Later in the day, the U.S. was to publish government report on building permits and housing starts as well as official data on consumer price inflation.
Forexpros
