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Forex - EUR/USD erases losses to trade almost unchanged

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Investing.com - The euro erased losses to trade almost unchanged against the U.S. dollar on Monday, ahead of an upcoming European Central Bank policy decision and amid caution over the outlook for U.S. budget negotiations.

EUR/USD pulled back from 1.3017, the session low, to hit 1.3073 during U.S. morning trade, inching up 0.04%.

The pair was likely to find support at 1.2996, Friday's low and resistance at 1.3189, Thursday's high.

Sentiment on the euro remained fragile amid speculation over the possibility of a rate cut by the ECB at Thursday's policy meeting.

Demand for the greenback continued to be underpinned after last week's minutes from the Federal Reserve's December meeting showed that some policymakers considered an earlier-than-expected end to the bank's quantitative easing program.

However official data on Friday showed the U.S. economy added 155,000 jobs in December, easing from an upwardly revised increase of 161,000 in November, fanning concerns that the pace of the recovery in the U.S. labor market is moderating.

Meanwhile, relief over an agreement to avoid the U.S. fiscal cliff was offset by concerns about continuing political wrangling over further budget cuts and raising the U.S. debt ceiling.

The euro was little changed against the pound, with EUR/GBP inching up 0.02% to 0.8133 and was lower against the yen, with EUR/JPY down 0.32% to 114.83.

The euro showed little reaction after official data earlier showed that producer price inflation in the euro zone declined 0.2% in November, defying expectations for a 0.1% increase.

A separate report showed that the Sentix index of investor confidence in the euro zone came in at minus seven in January, its highest level since February 2011, after a reading of minus 16.8 last month.

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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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