Forex - EUR/USD steady near 14-month highs after Fed

Investing.com - The euro was steady close to 14-month highs against the dollar on Thursday after the Federal Reserve reaffirmed its commitment to maintaining its easing program at the outcome of its latest policy meeting.

EUR/USD hit 1.3584 during late Asian trade, the session high; the pair subsequently consolidated at 1.3555, dipping 0.07%.

The pair was likely to find support at 1.3481, Wednesday’s low and resistance at 1.3640.

The Fed said Wednesday that it will continue its USD85 billion a month quantitative easing program “if the outlook for the labor market does not improve substantially.”

The U.S. central bank also reiterated that it will continue to hold interest rates close to zero until the unemployment rate falls below 6.5%.

The statement came after data showed that the U.S. economy contracted 0.1% in the fourth quarter, confounding expectations for growth of 1.1% and a sharp slowdown from growth of 3.1% in the preceding quarter.

The unexpected contraction was attributed to a 6.6% decline in government spending and a significant drop in private inventories. However, consumer spending rose by 2.2% and business investment was 8.8% higher.

Demand for the euro continued to be underpinned by the view that the situation in the euro zone is stabilizing.

The euro was trading close to one-year highs against the pound, with EUR/GBP sliding 0.23% to 0.8565 and was near 33-month highs against the yen, with EUR/JPY down 0.30% to 123.19.

Germany was to publish preliminary data on consumer inflation and the change in the number of unemployed later in the session, while the U.S. was to release the weekly government report on initial jobless claims.