Forexpros – The euro inched higher against the U.S. dollar in quiet trade on Wednesday, as market participants awaited the outcome of the Federal Reserve’s policy setting meeting later in the day.
EUR/USD hit 1.2318 during late Asian trade, the session high; the pair subsequently consolidated at 1.2308, inching up 0.03%.
The pair was likely to find support at 1.2224, Monday’s low and near-term resistance at 1.2389, last Thursday’s high.
Trade remained subdued ahead of the upcoming Fed announcement, amid speculation over whether the U.S. central bank will indicate if further quantitative easing measures are imminent.
Market sentiment was also hit by data showing that Chinese manufacturing activity slumped to an eight-month low in July, sparking renewed fears over a slowdown in the world’s second largest economy.
The euro’s gains were limited by mounting concerns that the European Central Bank will disappoint market expectations for bold steps to counter the euro zone debt crisis at its policy meeting on Thursday.
Expectations have been mounting that the ECB will announce measures to lower Spanish and Italian borrowing costs after central bank chief Mario Draghi pledged last week to do whatever is necessary to preserve the euro.
The euro was slightly higher against the pound and the yen, with EUR/GBP up 0.10% to 0.7856 and EUR/JPY inching up 0.05% to 96.17.
Later in the day, the U.S. was to produce data on non-farm employment change, while the Institute for Supply Management was to produce a report on manufacturing activity.
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