Euro higher as euro zone fin min meeting eyed

Investing.com - The euro was higher against all of its major counterparts on Wednesday, supported by optimism ahead of a meeting of euro zone finance ministers later in the week, while dovish comments by the head of the Federal Reserve continued to weigh on the U.S. dollar.

During European early afternoon trade, the euro was trading close to a one-month high against the U.S. dollar, with EUR/USD rising 0.31% to hit 1.3355.

On Tuesday, Fed Chairman Ben Bernanke said that it was still too early to declare victory in the U.S. economic recovery and added that the unemployment rate is still far too high.

The remarks came one day after the central bank head said further monetary accommodation is needed, fanning speculation that the Fed may embark on a third round of monetary easing.

The euro found support earlier following upbeat comments by Italian Prime Minister Mario Monti, who said the debt crisis in the euro zone was “almost over.”

Elsewhere, official data confirmed that the French gross domestic product grew by 0.2% in the fourth quarter, in line with preliminary estimates. In contrast, the euro zone economy contracted by 0.3% in the last three months of 2011.

Market participants were looking ahead to a meeting of euro zone finance ministers on Friday, amid speculation that they would agree on a larger debt firewall to combat the debt crisis in the region.

The single currency also gained ground against the pound, with EUR/GBP climbing 0.50% to hit 0.8389.

The pound weakened broadly after official data showed that the U.K. economy contracted by 0.3% in the last three months of 2011, more than the preliminary estimate of a 0.2% contraction.

A separate report showed that the U.K.’s current account deficit narrowed to GBP8.5 billion in the fourth quarter, broadly in line with expectations.

The euro edged higher against the yen and the Swiss franc, with EUR/JPY easing up 0.09% to hit 110.83 and EUR/CHF inching up 0.08% to hit 1.2062.

The yen remained supported as Japanese companies moved to repatriate overseas earnings before the end of Japan’s fiscal year on March 31.

The shared currency was broadly higher against the Canadian, Australian and New Zealand dollars, with EUR/CAD adding 0.41% to hit 1.3297, EUR/AUD surging 0.74% to hit 1.2821 and EUR/NZD gaining 0.45% to hit 1.6295.

In its semi-annual financial stability review released earlier, the Reserve Bank of Australia said the injection of around EUR1 trillion into Europe's financial system by the European Central Bank had stabilized that region's banks and the global financial system.

Later Wednesday, the U.S. was to produce official data on durable goods orders, as well as government data on crude oil stockpiles.