Euro hits 15-month high vs broadly weak dollar

Euro hits 15-month high vs broadly weak dollar
# 09 April 2011 13:26 (UTC +04:00)
The euro EUR= rose as high as $1.4422, though traders said it may struggle ahead of a large options barrier at $1.4430, which was expected to be heavily defended.

The dollar fell to its lowest since December 2009 versus a basket of currencies as the White House and Congress worked frantically to break a U.S. budget deadlock by the end of the day and avoid a government shutdown.

The ECB raised its key interest rate by 25 basis points to 1.25 percent on Thursday and the central bank’s president Jean-Claude Trichet signalled it was ready to tighten further if needed.

On balance, the comments were interpreted as making aggressive rate hikes look less likely, but the euro dipped only briefly afterwards and analysts said the prospect of another rate rise this summer would continue to support the single currency.

The euro was up 0.75 percent to $1.4411 EUR=. The euro’s rise has extended following its breach this week of resistance near $1.4283, its November high and roughly where it faced trendline resistance drawn from its July 2008 record high.

Beyond $1.4430, the euro will target the $1.4500 psychological level and then the January 2010 high around $1.4580
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