Forexpros – The euro was flat against the U.S. dollar on Wednesday, trading close to its lowest level in 11 months, after declining sharply the previous day when the Federal Reserve held back from increasing the size of its stimulus program.
EUR/USD hit 1.3016 during late Asian trade, the daily low; the pair subsequently consolidated at 1.3034, inching down 0.01%.
The pair was likely to find short-term support at 1.3008, Tuesday’s low and an 11-month low and resistance at 1.3144, the high of January 12.
On Tuesday, the Federal Reserve said the U.S. economy is maintaining its expansion and maintained the view that economic conditions are likely to warrant “exceptionally low” interest rates “at least through mid-2013.”
Sentiment on the single currency was also hit after German Chancellor Angela Merkel reiterated her opposition to increasing the EUR500 billion lending limit for the permanent euro zone bailout fund, the European Stability Mechanism, which should come into effect from the middle of next year.
Meanwhile, Italian borrowing costs rose back above 7% ahead of an Italian government debt auction later in the day. Italy’s Treasury was to auction as much as EUR3 billion of debt maturing in 2016, while Germany planned to sell EUR5 billion of two-year notes.
The euro was also almost unchanged against the pound, with EUR/GBP dipping 0.01% to hit 0.8421.
Also Wednesday, the euro zone was to release official data on industrial production.
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