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Forex - EUR/USD extends losses as markets sees Fed tightening down road

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Investing.com -

Investing.com - The euro slid against a strengthening dollar on Wednesday, as yields in U.S. government debt continued to rise on market talk that the Federal Reserve may hike interest rates sooner than once anticipated.

In U.S. trading, EUR/USD was down 0.13% at 1.3529, up from a session low of 1.3522 and off a high of 1.3557.

The pair was likely to find support at 1.3503, Thursday's low, and resistance at 1.3677, Friday's high.

U.S. Treasury yields continued to climb on Wednesday as markets prepped for the possibility that the Federal Reserve may hike interest rates sooner than once expected.

Fed officials have said rate hikes will come sometime after the U.S. central bank concludes its bond-buying program, which is seen taking place this year.

However, uncertainty as to how much time will elapse between the end of Fed stimulus programs and a decision to raise benchmark interest rates boosted the dollar over the euro, as many feel the economy continues to shake off the dust from rough winter weather and pick up its pace of recovery, which could prompt the U.S. central bank to act.

The euro, meanwhile, continued to slide on the European Central Bank's policy move announced last week.

The ECB cut all its main rates to record lows on Thursday and for the first time imposed negative deposit rates on commercial lenders.

Elsewhere, the euro was down against the pound, with EUR/GBP down 0.33% at 0.8058, and down against the yen, with EUR/JPY down 0.50% at 137.97.

On Thursday, in the euro zone is to release data on industrial production, while the ECB is to publish its monthly bulletin.

The U.S. is to release the weekly report on initial jobless claims, in addition to data on retail sales and import prices.

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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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