Forexpros – The euro rose to a fresh session high against the U.S. dollar on Wednesday, following the announcement of a Greek coalition agreement, while investors looked ahead to the conclusion of the Federal Reserve’s policy meeting.
EUR/USD hit 1.2723 during U.S. morning trade, the session high; the pair subsequently consolidated at 1.2719, gaining 0.27%.
The pair was likely to find support at 1.2567, Tuesday’s low and near-term resistance at 1.2746, Monday’s high and a one-month high.
The euro rose to a session high after Evangelos Venizelos, the head of Greece’s Pasok party, announced that a coalition government had been formed, which will allow Athens to resume negotiations with creditors on its international bailout deal.
Following the announcement, the leader of the conservative New Democracy party Antonis Samaras was sworn in as the new Greek prime minister.
Meanwhile, the yield on Spanish 10-year bonds pulled back to 6.75%, after climbing to euro-era highs earlier in the week, amid fears that Madrid will be forced to seek a full-fledged international bailout.
Sentiment on the greenback remained subdued ahead of the outcome of the Fed’s policy setting meeting, amid speculation that the U.S. central bank may implement a third round of quantitative easing measures after a recent string of disappointing economic data.
The euro extended gains against the pound and the yen, with EUR/GBP up 0.17% to hit 0.8079 and EUR/JPY jumping 0.92% to trade at 101.07.
The Federal Reserve’s policy announcement was to be followed by a closely watched press conference with Fed Chairman Ben Bernanke, to discuss the bank’s decision.
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