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Forex - EUR/JPY climbs on interest rate speculation

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Forex Pros - The euro was up against the yen on Wednesday, climbing to a daily high as the singly currency was boosted by speculation the European Central Bank would raise its benchmark interest rate.

EUR/JPY hit 113.81 during European afternoon trade, a daily high; the pair subsequently consolidated at 113.58, gaining 0.51%.

The pair was likely to find support at 112.21, Tuesday's low and resistance at 114.18, Tuesday's high and a three-month high.

ECB council member Yves Mersch said on Tuesday that bank officials may toughen their language on inflation when ECB policy members meet next week, indicating a readiness to raise interest rates in coming months.

Fellow ECB board member Nout Wellink highlighted his concern over short-term inflation developments in an interview to the Wall Street Journal on Tuesday, saying he was prepared to consider raising the ECB's benchmark interest rate in the "coming months".

The euro was also higher against the Swiss franc, with EUR/CHF adding 0.31% to hit 1.2857.

Earlier in the day, official data showed that industrial new orders in the euro zone rose unexpectedly in December, increasing by 2.1% after rising by a revised 2.2% in November.

Analysts had expected industrial new orders to drop by 0.8% in December.

Later Wednesday, ECB President Jean-Claude Trichet was to speak at a public engagement in Belgium.

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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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