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Forex - EUR/USD hits session high after U.S. data; cliff talks eyed

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Investing.com - Investing.com - The euro rose to the highest levels of the session against the U.S. dollar on Wednesday, following the release of mixed U.S. economic data, as investors continued to monitor negotiations among U.S. lawmakers to avoid the looming "fiscal cliff" crisis ahead of the year-end deadline.

EUR/USD hit 1.3254 during U.S. morning trade, the session high; the pair subsequently consolidated at 1.3246, up 0.4%.

The pair was likely to find support at 1.3157, the low of December 21 and resistance at 1.3294, the high of December 20.

Data released earlier showed that the U.S. S&P/Case-Shiller home price index rose at an annualized rate of 4.3% in October from a year earlier, above expectations for a 4% increase.

Month-on-month, U.S. home prices rose 0.7%, above expectations for a 0.5% increase, after rising by 0.4% in the preceding month.

A separate report from the Federal Reserve Bank of Richmond said that its manufacturing index fell to 5.0 in December from a reading of 9.0 in November. Analysts had expected the index to increase to 12.0 in December.

Meanwhile, market players remained focused on developments surrounding the fiscal cliff in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1.

President Barack Obama, currently vacationing in Hawaii, plans to return to Washington on Thursday in order to take part in talks to avert the crisis ahead of the year-end deadline, the White House said late Tuesday.

Both chambers of Congress are also due to return to work on Thursday.

Without a deal, the U.S. could fall back into recession and drag much of the world down with it.

Elsewhere, the euro rallied to a 16-month high against the broadly weaker yen with EUR/JPY up 0.94%, to hit 113.01, the highest level since August 2011.

Markets in Europe remained closed Wednesday for the Boxing Day holiday.

Volumes are expected to remain light because many investors have closed books to lock in profit before the end of the year, reducing liquidity in the market and increasing the volatility.

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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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