Forex - EUR/USD gains as dollar cools rally, tracks firming yen
Published Dec 10, 2014 12:32PM ET
Dollar slides on yen's rally, which takes euro up with it
Investing.com - The euro rose against the dollar on Wednesday after investors locked in the dollar's gains from last week's upbeat U.S. jobs report and sold for profits, with investors opting for safe-haven yen positions to digest growth concerns in China.
In U.S. trading, EUR/USD was up 0.45% at 1.2429, up from a session low of 1.2362 and off a high of 1.2436.
The pair was likely to find support at 1.2245, Monday's low, and resistance at 1.2448, Tuesday's high.
The yen rose on jitters over the outlook for China’s economy after Beijing set new restrictions on collateral for short-term loans.
The move fueled fears that the China may grow less than anticipated, which fueled safe-haven yen positions that came at the greenback's expense.
The yen often rises when Japanese stocks fall and growth-sensitive Australian and New Zealand dollars slide.
Still, the dollar's losses against the euro were seen as limited due to a surprise decision by the Greek government to bring forward a parliamentary vote for president to next week from February.
Markets were spooked by the risk of snap elections, which could take place if Prime Minister Antonis Samaras’s candidate is not approved by parliament, which could see the anti-bailout Syriza party take power.
Still, the euro held onto its gains as investors continued to sell the greenback for profits and await fresh U.S. data.
Last week’s strong U.S. jobs report for November prompted investors to bring forward expectations for the first hike in interest rates to mid-2015 from September 2015 ahead of the data.
The Labor Department reported Friday that the U.S. economy added 321,000 jobs in November, well past expectations for a 225,000 reading.
Investors were looking ahead to next week’s policy statement from the Fed amid speculation that policymakers could drop an assurance that interest rates will stay low for a "considerable time."
Elsewhere, the euro was up against the pound, with EUR/GBP up 0.25% at 0.7916, and down against the yen, with EUR/JPY down 0.58% at 147.20.
On Thursday, the U.S. is to release data on retail sales, the government measure of consumer spending, as well as the weekly report on jobless claims.
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Written By: Investing.com
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