Forexpros - The euro rose to a one-week high against the U.S. dollar on Monday, after the European Central Bank said it would begin buying Italian and Spanish bonds, while the greenback was pressured following an S&P downgrade of U.S. government debt.
EUR/USD hit 1.4425 during late Asian trade, the pair's highest since August 1; the pair subsequently consolidated at 1.4373, gaining 0.65%.
The pair was likely to find support at 1.4054, Friday's low and a two-week low and short-term resistance at 1.4453, the high of August 1.
The European Central Bank said late Sunday that it "will actively implement" its bond-buying program, indicating that it will likely buy Spanish and Italian government bonds in an attempt to ease investors concerns over the region's ongoing debt crisis.
"This program has been designed to help restoring a better transmission of our monetary policy decisions - taking account of dysfunctional market segments - and therefore to ensure price stability in the euro area," the ECB said in a statement late Sunday.
Meanwhile, the greenback came under pressure after ratings agency Standard and Poor's downgraded the U.S. sovereign debt rating by one notch to AA+ from AAA after markets closed Friday.
The ratings agency kept the U.S. rating outlook at negative, suggesting a further downgrade could be possible within the next 12 to 18 months.
S&P said the debt ceiling deal reached by lawmakers to cut the federal deficit by an estimated USD2.1 trillion over a decade did not go far enough and "America's governance and policymaking is becoming less stable, less effective, and less predictable than what we previously believed."
The euro was also up against the pound, with EUR/GBP adding 0.25% to hit 0.8734.
Later in the day, the euro zone was to publish a report on investor confidence.
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.
