Forex Pros – The euro held gains against the U.S. dollar on Wednesday, ahead of testimony on the U.S. economic outlook from Federal Reserve Chairman Ben Bernanke, while Irish government bond yields surged after the country’s debt was downgraded.
EUR/USD hit 1.4110 during European afternoon trade, the pair’s highest since Monday; the pair subsequently consolidated at 1.4084, rising 0.78%.
The pair was likely to find support at 1.3837, Tuesday’s low and resistance at 1.4227, Monday’s high.
Fed chair Bernanke was to give testimony before lawmakers in Washington and was likely to be asked why the central bank’s current stimulus measures have not been more effective in reducing unemployment.
Tuesday’s minutes from the Fed’s June policy-setting meeting showed that some policymakers believe further monetary easing may be necessary if the U.S. recovery remains sluggish or if inflation moderates.
Meanwhile, Irish bond yields surged to euro-lifetime highs after Ireland became the third euro zone member, after Greece and Portugal, to have its sovereign debt rating slashed to junk status, following a downgrade by ratings agency Moody’s on Tuesday.
The euro was also higher against the pound, with EUR/GBP rising 0.43% to hit 0.8820.
Earlier Wednesday, market sentiment was boosted after official data showed that Chinese gross domestic product expanded by 9.5% in the second quarter, easing concerns over a sharp slowdown in the world’s second largest economy.
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