Forexpros — The euro fluctuated between small gains and losses against the U.S. dollar on Wednesday, as a combination of fears over the ongoing debt crisis in the euro zone and concerns over the prospect of another round of stimulus by the Federal Reserve weighed.
EUR/USD hit 1.4417 during European early afternoon trade, the daily low; the pair subsequently consolidated at 1.4446, inching up 0.03%.
The pair was likely to find support at 1.4330, the low of August 26 and resistance at 1.4532, Tuesday’s high.
Concerns over the sovereign debt crisis in the euro zone came back into focus after an auction of Italian government debt on Tuesday met with tepid demand.
Earlier in the day, the euro found support after Germany’s cabinet approved a draft for legislation to grant new powers to the euro zone’s bailout fund, but Chancellor Angela Merkel still faced parliamentary opposition to the proposed changes.
Elsewhere, preliminary data showed that consumer price inflation in the euro zone remained unchanged at a rate of 2.5% in August. A separate report showed that the unemployment rate in the single currency bloc remained unchanged at 10.0% in July.
Meanwhile, speculation mounted that the Federal Reserve may act to shore up the faltering U.S. economy after its extended two-day meeting in September.
The minutes of the Fed’s August policy-setting meeting, released Tuesday, showed that some policymakers pushed for more aggressive measures to stimulate growth, including buying more government bonds.
The euro was almost unchanged against the pound, with EUR/GBP easing up 0.01% to hit 0.8861.
Later in the day, payroll processing firm ADP was to release a report on U.S. non-farm payrolls. The U.S. was also to publish official data on manufacturing activity in the Chicago area and factory orders.
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