Forexpros – The euro inched higher against the U.S. dollar on Monday, coming off the session low in holiday-thinned trade, but sustained concerns over the outlook for global growth and the crisis in the euro zone supported demand for the greenback.
EUR/USD pulled back from 1.2386, the session low, to hit 1.2443 during European afternoon trade, edging up 0.07%.
The pair was likely to find support at 1.2287, Friday’s low and a 22-month low and near-term resistance at 1.2455, Friday’s high.
The euro found support after Portugal’s Finance Minister Vitor Gaspar announced that the country’s EUR78 billion bailout program was on track. Gaspar also said Lisbon is planning a EUR6.65 billion liquidity injection to shore up the country’s fragile banking system.
Meanwhile, official data showed that producer price inflation in the euro zone was flat in April which could give the European Central Bank leeway to cut rates ahead of its policy meeting this week.
But concerns over the outlook for global growth continued in the wake of Friday’s dismal U.S. employment data, while worries that Spain’s high borrowing costs could force Madrid to seek a bailout also weighed.
The euro was fractionally lower against the pound, with EUR/GBP dipping 0.06% to hit 0.8089 and pushed higher against the yen, with EUR/JPY rising 0.18% to hit 97.20.
The yen firmed up earlier after the governor of the Bank of Japan said the central bank was closely monitoring the impact of the yen’s recent gains on the country’s largely export driven economy.
The comments came after the BoJ conducted a rate check on Friday indicating that it is still prepared to intervene in currency markets to halt the yen’s gains.
Trade volumes were expected to remain light on Monday, as markets in the U.K. were to remain closed for a national holiday.
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