Forex Pros – The euro extended modest gains against the U.S. dollar on Tuesday, edging up to a fresh daily high, but lingering concerns over Greek sovereign debt kept the single currency under pressure.
EUR/USD hit 1.4224 during European late morning trade, the daily high; the pair subsequently consolidated at 1.4203, gaining 0.35%.
The pair was likely to find support at 1.4047, Monday’s low and resistance at 1.4339, last Friday’s high.
Market sentiment improved after European Union finance ministers endorsed a EUR78 billion bailout for Portugal on Monday and for the first time floated the idea of talks with bondholders over extending Greece’s debt-repayment schedule.
The head of the euro zone’s finance ministers, Jean-Claude Juncker, said a “kind of re-profiling” of Greek debt had not been ruled out, but he eliminated the possibility of a “large restructuring”.
Finance ministers were to continue their talks later Tuesday in Brussels.
Meanwhile, the euro was down against the pound, with EUR/GBP shedding 0.20% to hit 0.8726.
Earlier Tuesday, U.K. government data showed that consumer price inflation jumped to a two-and-a-half year high of 4.5% last month.
Following the data, Bank of England Governor Mervyn King warned that trying to bring inflation back to the bank’s targeted 2% rate too quickly would risk harming the economy and undershooting the target in the medium term.
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