Forexpros – The euro extended early gains against the U.S. dollar on Wednesday, surging to an almost four-week high as investors awaited the outcome of a Slovakian vote on expanding the euro zone’s rescue fund.
EUR/USD hit 1.3816 during European late morning trade, the pair’s highest since September 16; the pair subsequently consolidated at 1.3772, rallying 0.97%.
The pair was likely to find support at 1.3564, Tuesday’s low and resistance at 1.3892, the high of September 16.
Earlier in the day, German Chancellor Merkel said she remained certain that plans to expand the powers of the European Financial Stability Facility would be ratified ahead of a European Union summit on October 23.
Slovakia’s parliament rejected a plan to enlarge the EFSF on Tuesday, resulting in the collapse of the nation’s government. However, the outgoing government said that a re-vote would go ahead as soon as Wednesday afternoon.
Meanwhile, EU Commission head Jose Manuel Barroso was announce proposals to recapitalize European banks and improve economic governance in the single currency bloc later in the day.
Sentiment was also boosted after official data showed that industrial production in the euro zone rose more-than-expected in August, climbing for the second straight month.
The euro was also sharply higher against the yen, with EUR/JPY surging 1.01% to hit 105.6.
Also Wednesday, the U.S. Federal Reserve was to release the minutes of its most recent policy-setting meeting.
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