Forex Pros – The euro was trading close to a four-and-a-half-month high against the U.S. dollar on Tuesday, after a senior European Central Bank policymaker said the banks near-term inflation outlook remained unchanged in the wake of Japan’s triple disaster.
EUR/USD hit 1.4204 during European late morning trade, the pair’s highest since November 4; the pair subsequently consolidated at 1.4233, easing up 0.05%.
The pair was likely to find support at 1.4138, Monday’s low and short-term resistance at 1.4281, the high of November 4 and an 11-month high.
ECB board member Juergen Stark said the earthquake, tsunami and ensuing nuclear crisis in Japan had greatly contributed to economic uncertainty in recent weeks, as had increased tensions in the Middle East.
However, he underlined the view that the bank will follow through with its plans to hike interest rates next month.
“For me, the situation in the euro area, with the ongoing economic growth and ongoing threat to price stability, in the short term has not changed,” he said.
Elsewhere, the greenback remained broadly weaker as crude oil prices remained well supported by U.S. led air strikes in Libya, fanning concerns over the impact of higher energy costs on the U.S. economy.
Meanwhile, the euro was fractionally lower against the yen, with EUR/JPY dipping 0.02% to hit 115.22.
Also Tuesday, Tokyo Electric Power Co., the operator of the stricken Fukushima Daiichi nuclear power plant, said it expected workers to restore power to parts of the building housing the most damaged reactors later in the day.
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