The euro was once again trading higher versus the majors as the EUR/USD reached its highest level against the dollar since mid-December. But the euro finished the day off its highs following a meeting of European finance ministers that failed to come up with any palpable steps to tackle the European debt crisis.
Talk of rising European interest rates has provided a boost to the euro as traders increase their expectations of a rate hike in Europe. Last week's hawkish comments by ECB President sparked talk of inflationary pressures in the EU and the euro has rallied ever since. This may help propel the euro higher given US policy makers are not expected to begin raising interest rates until early 2012.
At the end of the day, the euro was trading higher versus the dollar at 1.3380 from 1.3314. The EUR/CHF was up sharply at 1.2896 after opening the day at 1.2790. The EUR/GBP was higher at 0.8380 from 0.8353.
Euro strength may continue as interest rate differentials grow between the US and Europe. Current account numbers will be released from Europe today with economists forecasting a widening difference between exports and imports.
EUR/CHF support and resistance levels are found at the January 5th high at 1.2725 and last week's high of 1.2950.