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Euro Strengthens as Bundesbank Says Rates May Rise; Rupee Slumps



Good day forex traders and readers.

As we begin the new week of forex trading, hawkish comments such as noted in the Bloomberg report below are probably providing a form of support for the EUR/USD.

The resistance of 1.34 remains crucial to any continued bullish development

Barclays

By Joseph Ciolli & Lukanyo Mnyanda – 2013-08-19T14:46:16Z The euro rose to two-week high against the yen after rfcGermany ’s Bundesbank said the European Central Bank ’s pledge to keep borrowing costs low doesn’t rule out higher interest rates to curb inflation.

The single currency advanced versus most of its 16 major counterparts as Germany’s central bank said in its monthly report that forward guidance “doesn’t rule out an increase in the benchmark rate if greater inflation pressure emerges.” The yen weakened for a second day against the dollar as Japan reported a traccde deficit. India ’s rupee slumped to a record as the nation’s stocks slid.

“The comments from the German central bank are providing some support for the euro,” Charles St-Arnaud, a foreign-exchange strategist at Nomura Holdings Inc. in New York , said in a telephone interview. “There seems to be a slightly more positive view on the euro. It seems like investors are gradually piling in.”

The euro jumped 0.6 percent to 130.78 yen at 10:44 a.m. in New York after appreciating to 131.03 yen, the highest level since Aug. 5. The common currency rose 0.2 percent to $1.3350 after climbing to $1.34 on Aug. 8, the strongest since June 19. The yen weakened 0.5 percent to 97.97 per dollar. Rupee, Lira

India’s rupee plunged to a record low versus the dollar on speculation a strengthening U.S. economy will prompt the Federal Reserve to pare its $85 billion of monthly bond purchases as soon as next month. The currency fell 2.4 percent to 63.13 per dollar after falling 2.6 percent to 63.23.

Overseas investors sold a net $3 billion of Indian stocks and bonds last month as the slowest growth in a decade made Asia ’s third-largest economy vulnerable to a pullout of funds from […]

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