Forexpros – The euro traded steady to higher against the dollar on Tuesday, as the market took a breather with the Greek debt restructuring behind it and regrouped ahead of the Federal Reserve’s Tuesday monetary policy meeting.
In Asian trading on Tuesday, EUR/USD hit 1.3158, up 0.02%, up from a session low of 1.3146 and off from a high of 1.3159.
The pair was likely to find support at 1.3079, Monday’s low, and resistance at 1.3272, Friday’s high.
While Greece technically defaulted when it restructured its debts with private creditors recently, the country did live up to requirements set out by the European Union in exchange for a EUR130 billion rescue fund.
Restructuring was one of those requirements.
European leaders are expected to formally approve disbursement in the coming day.
However, fears are building that Portugal will come under pressure to work out its debts as well.
In Portugal bonds yields are spiking over 13%, as talk of a bailout grows.
In the U.S., the Federal Reserve will meet to set interest rates later Tuesday, and with unemployment rates improving, expectations the Fed will allude to a need for more stimulus measures are waning.
Fed stimulus tools such as quantitative easing — asset purchases from banks that pump liquidity into the financial system — weaken the dollar, and hopes the Fed will stand down have bolstered the greenback recently.
Still, the dollar was a little jumpy ahead of the Federal Reserve meeting as anticipation built.
The euro was up against the pound and up against the yen, with EUR/GBP trading up 0.05% at 0.8414 and EUR/JPY up 0.27% at 108.47.
Later Tuesday in the eurozone, the ZEW economic sentiment index for Germany and for the entire single currency bloc will publish.
Later in the day, ECB President Mario Draghi is due to speak, while eurozone finance ministers are scheduled to hold talks throughout the day to address Greece’s progress.
On top of the Federal Reserve meeting in the U.S. later Tuesday, the government will release data on retail sales, the foremost indicator of consumer spending, which accounts for the majority of economic activity.
The country is also to produce official data on business inventories, a signal of future business spending.
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