Forex - EUR/USD edges lower as investors prep for end of stimulus

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Investing.com - The euro traded lower against the dollar on Monday as investors continued to seek safety in the greenback on sentiments the Federal Reserve is growing closer to unwinding stimulus programs.

Federal Reserve Chairman Ben Bernanke said last week that monetary stimulus programs, which weaken the dollar to spur recovery, may scale back this year if the economy improves.

In U.S. trading on Monday, EUR/USD was down 0.10% at 1.3112, up from a session low of 1.3259 and off from a high of 1.3123.

The pair was likely to find support at 1.2956, the low from June 3, and resistance at 1.3416, Wednesday's high.

The dollar continued to advance after the Federal Reserve Bank of Philadelphia said late last week that its manufacturing index rose to 12.5 in June from -5.2 in May, well above expectations for a -2.0 reading.

A separate report showed that U.S. existing home sales climbed 4.2% to 5.18 million units in May from April's total of 4.97 million, far surpassing market calls for a 0.6% increase.

Fed Chairman Ben Bernanke said last week that monetary authorities could begin scaling back the U.S. central bank's USD85 billion-a-month asset purchasing program later this year and close it down completely by the middle of 2014 if the economy gains steam.

Elsewhere, the Ifo index of German business climate improved to 105.9 in June from 105.7 in May, in line with market expectations, though the single currency shrugged off the data.

The euro, meanwhile, was down against the pound and down against the yen, with EUR/GBP trading down 0.20% at 0.8492 and EUR/JPY trading down 0.28% at 128.07.

On Tuesday, the U.S. is to publish official data on durable goods orders, a leading indicator of production, as well as closely watched reports on consumer confidence and new home sales.









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This article appears in: Investing , Forex and Currencies

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