The euro was little changed against the US dollar during Fridays thin trade, trading in proximity to seven-month highs, as markets awaited the economic sentiment report out of the Euro zone later in the day, while Feds decision not to taper this month was still weighing on the greenback.
EUR/USD touched a session high at 1.3542 at 6:25 GMT, after which consolidation followed at 1.3533, gaining a mere 0.02% for the day. Support was expected at September 18th low, 1.3338, while resistance was to be encountered at September 19th high and also a seven-month high, 1.3568.
US dollar was largely sold, after on Wednesday the Federal Reserve Bank refrained from introducing a change in its easing program of 85 billion USD per month. This decision underscored Chairman Ben Bernanke’s willingness to do anything to lower unemployment and pushed back market expectations for a tightening of policy. Bernanke said at the press conference after the FOMC meeting, that the central bank must determine its policies based on “what’s needed for the economy,” even if it surprises global markets.
“I still think there’s a chance that the Fed could taper in December,” said Junichi Ishikawa, a Tokyo-based analyst at IG Markets Securities Ltd., cited by Bloomberg. “Bernanke is likely to set up a path for policy normalization before he departs from his post. Whether dollar-yen can retest the 100 level depends on economic data in the U.S. and the subsequent stock performance.”
No economic indicators out of the United States were scheduled for release today and trade volumes were to remain light.
In the mean time, the preliminary index of economic sentiment in the countries that share the euro currency probably improved to a reading of -14.5 in September, or the highest level since July 2011, from -15.6 in August, according to the median estimate of economists participated in a survey by Bloomberg News.
At the same time, market players awaited the outcome of Germanys general election on Sunday, as Chancellor Angela Merkel was expected to win a third term.
In addition, European Central Bank President Mario Draghi will take a statement in Brussels on September 23rd.
Elsewhere, the euro was lower against the pound and the yen, as EUR/GBP cross lost 0.14% on a daily basis to trade at 0.8429 at 7:35 GMT. EUR/JPY pair was down by 0.10% to trade at 134.44 at 7:35 GMT.
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