BZ:Forex - EUR/USD turns lower as Greece rally ebbs
Forex Pros – The euro erased gains against the U.S. dollar on Wednesday, retreating from a one-week high as market focus turned from Tuesday’s parliamentary confidence-vote win by Greece’s government to next week’s vote on harsh austerity measures.
EUR/USD pulled back from 1.4433, the pair’s highest since June 15; the pair subsequently consolidated at 1.4377 during European late morning trade, down 0.23%.
The pair was likely to find support at 1.4301, Tuesday’s low and resistance at 1.4496, the high of June 14.
Greece’s parliament supported Prime Minister George Papandreou’s new cabinet on Tuesday, wining the support of 155 out of 300 parliament members.
However, markets remained cautious as Greek lawmakers still needed to support next week’s vote on new austerity measures, which include harsh spending cuts and new taxes over the next five years.
European finance ministers said earlier in the week that they would hold off on a EUR12 billion payment promised for July until plans to cut the deficit, sell state assets and impose a levy on wages are passed.
Approval must come by June 30 so that Greece is ready for a meeting of euro-zone finance ministers scheduled for July 3.
Meanwhile, markets focused on the Federal Reserve's policy setting meeting, which was to be followed with a press conference by Fed Chairman Ben Bernanke later in the day.
Mr. Bernanke was widely expected to reaffirm the bank’s pledge to hold interest rates near zero for an extended period, while investors will watch for clues regarding the current round of quantitative easing, which was due to end on June 30.
Elsewhere, the euro was broadly higher against the pound, with EUR/GBP climbing 0.41% to hit 0.8909.
Earlier Wednesday, official data showed that industrial new orders in the euro zone rose by a seasonally adjusted 0.7% in April, after falling by a revised 1.5% in March. Analysts had expected industrial new orders to rise by 1.0% in April.
