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Forex - Euro close to 4-month lows vs. dollar

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Investing.com -

Investing.com - The euro slid against the dollar on Wednesday, nearing last week's four-month lows as a widening yield gap between euro zone and U.S. government bonds pressured the single currency lower.

EUR/USD edged down 0.09% to 1.3539, 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. The yield on the U.S. 10-year Treasury note rose to 2.64% on Tuesday, its highest in a month.

Borrowing costs in the euro zone have fallen in recent sessions due to the diverging monetary policy stance between the European Central Bank and the Federal Reserve.

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 and shore up the recovery in the region.

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

The euro also edged lower against the yen, with EUR/JPY dipping 0.07% to 138.57.

Elsewhere Wednesday, USD/JPY was at 102.31, little changed from 102.34 late Tuesday.

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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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