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Forex - EUR/USD higher as fiscal cliff deal spurs risk rally

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Investing.com - The euro was trading close to nine-month highs against the U.S. dollar on Wednesday, as a deal to avert the U.S. fiscal cliff spurred investor demand for riskier assets.

EUR/USD hit 1.3299 during European afternoon trade, the pair's highest since December 12; the pair subsequently consolidated at 1.3270, gaining 0.58%.

The pair was likely to find support at 1.3174, the low of December 31 and near-term resistance at 1.3307, the high of December 19 and a nine-month peak.

Market sentiment was bolstered after U.S. lawmakers passed a compromise bill on Tuesday to avoid the fiscal cliff, blocking a series of looming tax increases and spending cuts that could have pushed the U.S. economy back into a recession.

However, investors remained cautious over the longer term outlook, with negotiations on raising the U.S. debt ceiling still to come in February.

The euro was up against the pound, with EUR/GBP rising 0.26% to 0.8141 and was trading close to a one-and-a-half year high against the broadly weaker yen, with EUR/JPY up 0.84% to 115.47.

Later Wednesday the Institute of Supply Management was to produce a report on U.S. manufacturing 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.


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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