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Forex - EUR/USD extends gains, hits 8-1/2 month highs

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Investing.com - The euro extended gains against the U.S. dollar on Wednesday, to hit eight-and-a-half month highs as hopes for a deal to avoid the U.S. fiscal cliff and improved German business confidence data boosted demand for the single currency.

EUR/USD hit 1.3300 during European afternoon trade, the pair's highest since April 4; the pair subsequently consolidated at 1.3296, up 0.51%

The pair was likely to find support at 1.3223, the session low and resistance at 1.3366, the high of April 3.

Investor confidence was boosted by signs of progress in negotiations aimed at avoiding the fiscal cliff, automatic tax hikes and spending cuts due to take effect on January 1, which investors fear could threaten U.S. and global growth.

In the euro zone, data showed that German business confidence continued to improve in December, in spite of the deteriorating outlook for the euro zone economy.

The Ifo economic institute's German business climate index came in at 102.4 points this month, up from 101.4 in November, beating analysts' expectations for a reading of 102.0.

The euro hit a two-month high against the pound, with EUR/GBP rising 0.25% to 0.8159 and was trading close to 16-month highs against the weaker yen, with EUR/JPY rallying 0.80% to 112.30.

Later Wednesday the U.S. was to publish government data on building permits, housing starts and crude oil stockpiles.

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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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