RTRS: FOREX-Euro edges up vs dollar on Mideast demand
By Naomi Tajitsu
LONDON, Nov 10 (Reuters) - The euro rose against the dollar on Wednesday, boosted by Middle East buying, while key technical support helped curb selling of the single currency, seen in the past few days.
The euro recovered from a three-day losing streak versus the dollar, as investors speculated more quantitative easing by the Federal Reserve will continue to sting the U.S. currency as the European Central Bank sticks to its current monetary policy.
Analysts said the dollar's bounce since late last week would be short-lived and the euro would continue its uptrend, after it hit its highest in nine months versus the dollar last week. "Despite the correction we've been seeing, the euro's bull trend is still in place," said John Hydeskov, senior currency analyst at Danske in Copenhagen.
"With the Fed pumping $600 billion into the economy and the ECB sticking to its current policy (under which monetary easing is unlikely), we're going to continue to see a divergence in policy."
By 0917 GMT, the euro EUR= rose 0.2 percent on the day to $1.3808, with traders citing solid buying by Mideast names as helping pull the single currency back from a slide to around $1.3732.
That was roughly a low hit in late October, and technical analysts said it was offering support to the single currency.
The dollar was little changed versus a currency basket .DXY, while it slipped slightly against the yen to 81.66 yen, retreating from the day's high around 81.90 yen.
Traders cited dollar buying by Japanese names, but also said sell-orders from Japanese exporters around 82.00 yen was helping block a rise in the dollar beyond that level.
Sterling GBP=D4 was little changed at $1.5980, as investors awaited the Bank of England's quarterly inflation report later in the day for clues as to whether the UK central bank will embark on more quantitative easing.
Markets are still betting the central bank may eventually expand its 200 billion pound ($320 billion) asset purchase programme, although recent firm data has reduced expectations of such a move. [ID:nLDE6A71JF]
"Should the inflation report make it clear that quantitative easing remains an option for the BoE that would put pressure on sterling," Commerzbank analysts said in a note.
