EUR/USD steady after Plosser comments, Italian political uncertainty

The euro was trading steadily against the US dollar during the early phase of US trade session, after comments made by Fed President for Philadelphia, Charles Plosser and as political uncertainty in Italy could lead to a decrease in countrys credit rating by Fitch.

EUR/USD touched a session high at 1.3555 at 13:00 GMT, after which consolidation followed at 1.3526, gaining 0.03% for the day. Support was likely to be received at September 25th low, 1.3460, while resistance was to be met at September 27th high, 1.3564.

Earlier on Monday the Fed President for Philadelphia, Charles Plosser, said that the Federal Open Market Committee (FOMC) has undermined confidence in the forward guidance on US monetary policy, after the bank abstained from scaling back its monthly asset purchases at its meeting in September. According to Plosser, this could also cast a doubt upon the statement that the Federal Reserve may tighten its policy, if unemployment rate in the country reaches a specific level. As Fed delayed tapering of its easing program, uncertainty over the future of its policy was increased.

In addition, Fitch Ratings warned that Italys credit rating may be diminished in case of a coalition government collapse, as this, on the other hand, may influence countrys fiscal objectives. The current rating of the country, according to Fitch, is BBB+, which is only three levels above the so called “junk” level.

Meanwhile, in the United States, the Chicago PMI rose to a value of 55.7, reaching its highest point in four months in September, from 53.0 in August. Experts had projected that the index will advance to a reading of 54.0. Values above the key level of 50.0 are usually an indication that business activity has increased. This indicator marked its third consecutive monthly climb, as Septembers result came in consonance with the moderate pace, at which US economy has been recovering. The sub-index of new orders advanced to its highest level since February.

Elsewhere, the euro was losing ground against the pound, with EUR/GBP cross down by 0.13% for the day to trade at 0.8367 at 14:59 GMT.