Published: Wed, 22 Apr 2009 21:27:03 +0200

Euro Holds Gains Against U.S. Dollar

(CEP News) A small rise in market sentiment could be helping the euro move higher against the U.S. dollar Wednesday afternoon.

It has been a relatively quiet day for the euro. No major data was released during the European session and flat U.S. equity markets are not providing much direction for EUR/USD.

The cross jumped over a cent following the North American open and has managed to hold gains above 1.30 USD, hitting a high of 1.3037 USD.

Negative news from GM CFO Ray Young caused a reversal in EUR/USD as it dipped below 1.30. The Wall Street Journal quoted Young saying that the auto company will not be able to make a $1 billion debt payment due on June 1.

The euro retraced its losses and remains at the top end of Wednesday's channel.

Meg Brown, currency strategist at Brown Brothers Harriman, said support appears to be holding at the 1.28 USD level and could point to a move higher in the short term.

"The euro tested the 1.28 level twice but was unable to break [below] and I think that signals a reversal pattern," she said.

The biggest move in the euro on Wednesday was seen against sterling. EUR/GBP rallied over 1.5 pence since the UK budget was released earlier in the morning, and the euro continues to hold gains at the top of the day's range, trading at 0.89720 GBP.

"The move higher in EUR/GBP could be boosting the euro in the other crosses," Brown said.

Euro/USD up 0.71 cents to 1.3017

USD/CAD up 0.09 cents to 1.2367

USD/Yen down 0.59 points to 98.15

GBP/USD down 1.65 cents to 1.4509

AUD/USD down 0.17 cents to 0.7098

Euro/Yen down 0.04 points to 127.76

Euro/GBP up 1.52 pence to 0.8972

GBP/CAD down 1.89 cents to 1.7945

CAD/Yen down 0.53 points to 79.37

Euro/CAD up 1.02 cents to 1.6099

The U.S. Dollar Index is down 0.35 points to 86.19

All data taken at 3:25 p.m. EDT.

By Neils Christensen, neilsc@economicnews.ca, edited by Sarah Sussman, ssussman@economicnews.ca