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Forex - EUR/USD gains as U.S. puts plans for Syria attack on hold

Published 09/11/2013, 11:52 AM
Updated 09/11/2013, 11:54 AM

Investing.com - The dollar fell against the euro on Wednesday after the U.S. put on hold plans to launch limited military strikes on Syria, which enticed investors out of the dollar and into risk-on asset classes.

In U.S. trading on Wednesday, EUR/USD was up 0.30 % at 1.3307, up from a session low of 1.3231 and off from a high of 1.3314.

The pair was likely to find support at 1.3105, Friday's low, and resistance at 1.3280, Monday's high.

The single currency rose as the greenback fell on Wednesday after U.S. President Barack Obama said his administration would support a Russian plan to take away Syria's chemical weapons cache that would put U.S. military strikes on hold.

The dollar continued to come under pressure amid ongoing doubts as to whether or not the Federal Reserve will announce at its Sept. 17-18 policy meeting plans to begin tapering its monthly USD85 billion asset-purchasing program.

A lackluster August jobs report has many investors concerned the U.S. central bank may delay plans to begin scaling back asset purchases to later this year, while others feel a September start date will see very minor tapering, which would keep the greenback soft.

Elsewhere, the euro was down against the pound and up against the yen, with EUR/GBP trading down 0.20% at 0.8417 and EUR/JPY trading up 0.01% at 133.21.

The pound firmed after official data revealed that the U.K. unemployment rate fell to 7.7% in the three months to July from 7.8% in the previous three months.

Analysts were expecting the unemployment rate to remain unchanged.

The number of individuals claiming unemployment benefits in the U.K. fell by 32,600 in August, better than market calls for a decline of 22,000 people.

The data stoked already growing expectations that the Bank of England may raise interest rates sooner than it has indicated.

Last month, Bank of England Governor Mark Carney said monetary authorities plan to keep the U.K.'s benchmark interest rate at a record-low 0.5% for at least three years though improving economic indicators have many betting that rates may rise sooner than expected.

On Thursday, the U.S. is to release the weekly government report on initial jobless claims as well as official data on import prices.







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