Forexpros – The euro gained ground against the U.S. dollar on Thursday, on a report that Greece is close to a debt restructuring deal with its private creditors and U.S. monetary easing vow.
EUR/USD traded to a high of 1.3184 and posted a low of 1.3091. It is currently trading at 1.3145, up 0.29% on the session.
The pair was likely to find support at 1.2952, Tuesday’s low and technical resistance exists at 1.3236, the high of December 13.
The single currency climbed to a five week high against the dollar when, Fed Chief Ben Bernanke stated yesterday, “We are prepared to provide further monetary accommodation if employment is not making sufficient progress toward our assessment of its maximum level, or if inflation shows signs of moving further below its mandate consistent rate. Bond buying is an option that’s certainly on the table.”
In addition to the Fed’s vow to keep interest rates low until at least late 2014.
Alan Ruskin of Deutsche Bank explained to Bloomberg, “The Fed’s statement reinforced trends that were equity bullish and the risk on trade. The extent of the rally will ultimately be defined by European events, rather than the U.S..”
News that the cost of insuring against default in European corporate debt dropped to the lowest in nearly five months adding to the euro positive sentiment.
Meanwhile in Greece, unsubstantiated reports that private creditors will submit a new offer with an average interest rate of 3.75% on bonds as part of a debt restructuring; helped fuel the euro’s advance.
The euro fell against the pound with EUR/GBP easing lower 0.04% to 0.8369.
In addition Thursday, U.S. new home sales surprisingly dropped 2.2%. Analyst’s were expecting a 2% gain.
Authors: ForexPros
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