Forex - EUR/JPY hits 4-year high on hawkish ECB comments
Investing.com - The euro hit a 4-year high against the yen on
Tuesday after a key European Central Bank official expressed
concern about using negative interest rates to ward off
In U.S. trading on Tuesday, EUR/JPY was up 0.40% at 135.59, up from a low of 134.62 and off a high of 135.71.
The pair sought to test support at 132.21, the low from Nov. 11, and resistance at 136.0, the high from Oct. 29, 2009.
The euro rose against safe-haven currencies such as the yen after European Central Bank board member Joerg Asmussen warned that monetary authorities must be "very careful" when considering the use of negative interest rates to steer the economy away from low inflation rates, which supported the single currency.
Elsewhere, data released on Tuesday showed that the ZEW index of German economic sentiment rose to a four-year high in November.
The ZEW index of German economic sentiment rose to 54.6 this month from October's 52.8 reading, beating market forecasts for the index improve to 54.0.
The euro also saw demand from investors avoiding the dollar amid ongoing expectations for the Federal Reserve to reveal it has not yet made plans to begin tapering the pace of its monthly asset purchases.
Federal Reserve Chair Ben Bernanke is due to speak in public later Tuesday, and markets took up positions betting that the nation's top economist won't signal the need for a timetable to begin tapering the Fed's USD85 billion in monthly bond purchases, which keep the greenback weak to spur recovery.
Last week, Fed Chair Nominee Janet Yellen suggested the economy still needs the U.S. central bank's ultra-loose monetary policies to ensure recovery, and on Monday, the Fed's Bank of New York chief William C. Dudley said he was hopeful that recovery will gain steam soon but made no indication over a need to consider scaling back bond purchases.
Investors also bet that the minutes of the Fed's October meeting due for release on Wednesday will paint a similar picture for the need to hold off on scaling back stimulus tools for now.
The euro, meanwhile, was up against the pound and up against the U.S. dollar, with EUR/GBP trading up 0.14% at 0.8396 and EUR/USD trading up 0.18% at 1.3530.
On Wednesday in the euro zone, Germany is to release data on producer price inflation, while Japan is to release data on its trade balance.
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