Euro was higher versus the US dollar on Tuesday, mostly boosted by speculations whether US Central Bank will embark on a reduction of scale of easing later this year.
EUR/USD pair reached 1.3299 during the afternoon phase of European trade, currently the session high, after which consolidation followed at 1.3272. The cross was still up by 0.12% for the day. Support was expected at Monday low, 1.3176, while resistance was to be encountered at June 6th high, 1.3305.
The pair was influenced by speculation over whether FED will begin to taper its asset purchases, following Friday’s upbeat employment data and after ratings agency Standard & Poor’s revised its long-term outlook on the credit rating of the United States from negative to stable on Monday. The agency stressed on the improving economic conditions in the country.
The euro recorded a sharp decline versus the Japanese yen, as EUR/JPY fell to 128.58, erasing 1.76%, after Bank of Japan abstained from changing its monetary policy course. This decision came one day after official report said, that Japanese economy expanded by 4.1% in the first quarter of the year on annual basis, above the preliminary estimate of a 3.5% growth.
The yen strengthened against the dollar and the euro, supported by the significant dip in Japanese shares overnight. Additionally, Bank of Japan disappointed market expectations for eventual measures to ease government bond market volatility.
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