EUR/USD: Investors sell Euro under the pressure of external background
The pair EUR/USD is traded downward at the Forex currency market on Wednesday morning due to the resumption of unrest in Libya and maintenance of stable positions of the U.S. FR on monetary policy.
By 10.15 Moscow time the Euro is at 1.3759 against closing session level of 1.3777 yesterday.
Developments in Libya force investors to hedge risks: opposition is preparing for new confrontations with the forces of al-Gaddafi, while Fitch downgraded the rating of Libya by three levels –to BB from BBB. Safe harbors are in demand again.
There are also disturbances in Oman, where military equipment is still on the streets on the cities, and in Yemen as well.
The U.S. Federal Reserve still remains a bastion of stability in turbulent times. Chairman of the Federal Reserve Ben Bernanke said earlier in his speech before the Senate that interest rate will be maintained at the low level for a long time, and this was what market wanted to hear. Monetary politician also dwelled on the issue of current rise in oil prices, explaining that under such catalyst, inflation can begin to strengthen, which will lead to slower economic growth.
In general external background will still remain the major driver today.
Most likely the pair EUR/USD will not go beyond the range of 1.3690-1.3790 at the trading session on Wednesday.
