Forex - Euro lower vs. firmer dollar after Fed

A A A - " The euro was lower against the firmer dollar on Thursday after the Federal Reserve was less dovish than expected on the economic outlook, fuelling speculation that it could start scaling back stimulus sooner than expected.

EUR/USD hit 1.3689 during European morning trade, the lowest since October 22; the pair subsequently consolidated at 1.3711, shedding 0.18%.

The pair is likely to find support at 1.3661, the low of October 22 and resistance at 1.3812, the high of October 29.

The dollar recovered after the Fed left its USD85 billion-a-month asset purchase program in place following its monthly meeting on Wednesday. The bank gave no clear indication whether it would start scaling back stimulus at the December meeting or continue it into the start of 2014.

"The housing sector has slowed somewhat in recent months," the Fed statement said. However, Fed officials stuck to the view that the economy is expanding "at a moderate pace" and said downside risks were diminishing.

Investors will now be looking ahead to the U.S. nonfarm payrolls report for October, due for release next Friday, to help assess the timing for a possible reduction in Fed stimulus.

The euro was lower against the yen, with EUR/JPY down 0.45% to 134.70.

The Bank of Japan made no changes to its stimulus program on Thursday and reiterated that inflation will be close to reaching the bank's 2% target by April 2015.

Elsewhere, the single currency was also weaker against the pound, with EUR/GBP sliding 0.18% to 0.8548. offers an extensive set of professional tools for the financial markets.
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This article appears in: Investing , Forex and Currencies

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