EUR/USD ended the month with substantial gains as the Vice Chair of Federal Reserve reported an increased possibility of interest rate hike in the month of September. EUR/USD traded in a range between 1.1172 and 1.1262 before it settled at 1.1215.
Trend of EUR/USD:
The pair was up by 0.0028 or 0.25% on the session. In August, EUR/USD gained more than 2.5% in spite of a losing streak that lasted 4 days last week when it fell below 1.12. The euro remains down by more than 7% against the dollar. EUR/USD gained support at 1.0847 which is the low from 5thAugust and suffered resistance at 1.1616 which is the high from 25thAugust.
The Vice Chair of Fed blamed the plunging energy prices, a stronger value of dollar and a soft commodities market for creation of downward pressure on inflation. The Fed is keeping a close eye on the slack in the U.S economy and the labor market as it decides whether it will raise short-term interest rates for the first time in nearly 10 years. A gradual reduction of slack is associated with less downward pressure on inflation.
Strength of the Greenback:
The U.S. Dollar Index measuring the strength of the greenback as compared to a basket of six other major currencies gained 0.02% and closed at 95.98. The index has closed higher on five of the last six sessions.