Forex Pros - The euro extended gains against the U.S. dollar on Wednesday, after data showed that euro zone producer prices rose at the fastest pace in 29 years in January, underlining expectations for a near-term rate hike by the European Central Bank.
EUR/USD hit 1.3838 during European morning trade, the daily high; the pair subsequently consolidated at 1.3830, gaining 0.38%.
The pair was likely to find support at 1.3646, the low of February 23 and short-term resistance at 1.3855, Monday's high.
Earlier in the day, Eurostat said industrial producer prices jumped 1.5% from December, the strongest gain since January 1982.
On an annual basis, producer prices were 6.1% higher than in January 2010, the sharpest year-to-year increase since October 2008. In December, industrial producer prices rose 0.8% on a monthly basis and 5.3% annually.
Eurostat said the monthly jump in producer prices was driven by energy and intermediate goods.
Producer prices for energy rose 3.2% in January, the sharpest gain since July 2008, while intermediate goods prices rose 1.5%, matching the record gain seen in January 1995.
The euro was also higher against the pound, with EUR/GBP rising 0.15% to hit 08481.
Later Wednesday, Federal Reserve Chairman Ben Bernanke was to testify for a second day before the Senate Banking Committee in Washington, while the Fed was to publish its Beige Book. The U.S. was also to publish data on private sector payrolls compiled by payroll processing firm ADP.
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