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Forex - EUR/USD remains near 7-1/2 month highs in subdued trade

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Investing.com - " The euro remained near seven-and-a-half month highs against the U.S. dollar in subdued trade on Friday, as speculation the Federal Reserve could hold back from tapering its stimulus program continued to dampen demand for the greenback.

EUR/USD hit 1.3703 during U.S. morning trade, the pair's highest since February 1; the pair subsequently consolidated at 1.3677, easing up 0.01%.

The pair was likely to find support at 1.3581, the low of October 3 and resistance at 1.3711, the high of February 1.

The dollar remained under pressure amid fears over the impact of the government shutdown on the already fragile economic recovery, which could prompt the Federal Reserve to delay plans for scaling back its stimulus program until at least the start of next year.

The possibility of another debt crisis also loomed, as the temporary debt ceiling agreement reached early Thursday does not resolve the underlying budgetary issues dividing Republicans and Democrats.

The deal will fund the government until January 15 and raise the government borrowing limit until February 7. Both sides also agreed to talks over broad budget issues in an attempt to reach a longer-term deal by December 13.

Separately, risk sentiment found support after official data earlier showed that China gross domestic product grew by 7.8% in the third quarter, in line with expectations and up from 7.5% in the three months to June.

The data eased concerns over the strength of the recovery in the world's second-largest economy.

The euro was fractionally lower against the pound with EUR/GBP easing 0.07%, to 0.8454.

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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.

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