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Forex - Broadly weaker euro remains under pressure

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Investing.com -

Investing.com - The euro was trading within striking distance of four-month lows against the dollar on Wednesday, as the single currency remained under pressure after the European Central Bank's monetary easing last week.

EUR/USD was steady at 1.3550, not far from the four-month trough of 1.3502 reached last Thursday.

The pair was likely to find support at 1.3500 and resistance at 1.3601, Tuesday's high.

Demand for the dollar continued to be underpinned by higher U.S. Treasury yields.

Borrowing costs in the euro zone have fallen in recent sessions due to diverging monetary policy between the ECB and the Federal Reserve, widening the yields between some euro area government bonds and U.S. Treasuries.

The ECB cut all its main rates to record lows on Thursday and for the first time imposed negative deposit rates on commercial lenders, in a bid to tackle persistently low rates of inflation in the euro zone.

In contrast, the Fed is considering when to start raising interest rates as the economic recovery continues to gain traction.

The euro fell to four-month lows against the firmer yen, with EUR/JPY down 0.45% to 137.95.

Elsewhere, Wednesday, EUR/GBP was at 0.8071 after falling to lows of 0.8054 earlier, the weakest since December 2012.

Sterling was boosted after data showed that the U.K. unemployment rate fell to 6.6% in the three months to April, the lowest since early 2009.

The claimant count, or number of people receiving jobless benefits fell by 27,400, ahead of forecasts for a for a decline of 25,000 people. April's figure was revised to a drop of 28,400 from 25,100.

The data added to the view that the Bank of England will raise interest rates ahead of other central banks as the economic recovery continues to deepen.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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