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Forex - EUR/USD edges higher, but remains near 4-month lows

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Investing.com - The euro edged higher against the U.S. dollar on Thursday, but remained close to four-month lows as fears over a potential fallout from a last minute bailout for Cyprus and growing concerns over political deadlock in Italy weighed on demand for the single currency.

EUR/USD hit 1.2814 during late Asian trade, the session high; the pair subsequently consolidated at 1.2793, adding 0.11%.

The pair was likely to find support at 1.2737, the low of November 21 and resistance at 1.2867, Wednesday's high.

Investors remained cautious, as Italian centre-left leader Pier Luigi Bersani seemed to have only slim hope of forming a government after talks with rival party leaders ended on Wednesday with rejection from Beppe Grillo's 5-Star Movement.

Markets were also jittery as Cyprus prepared to reopen its banks for the first time in nearly two weeks, with fears of bank runs prompting the government to impose a number of controls, including limiting withdrawals and banning cheques.

Earlier Thursday, official data showed that German retail sales rose unexpectedly in February, ticking up 0.4% after a 3% rise the previous month.

Analysts had expected retail sales to fall 0.1% last month.

The euro was lower against the pound with EUR/GBP slipping 0.10%, to hit 0.8438.

Later in the day, the U.S. was to release the weekly government report on initial jobless claims as well as revised data on fourth quarter economic growth.

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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.

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