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by ForexNewsNow Team on October 1, 2010

EUR USD analysis: Euro hits 6-month high after Dudley speech

EUR USD analysis - Fed official Bill DudleyNEW YORK (Forex News Now) – The euro surged to a 6-month high against the dollar on Friday, breaking above 1.37, after key Federal Reserve official Bill Dudley said additional easing measures by the Fed are likely.

In late U.S. currency market trading, EUR/USD hit 1.3777, its highest since March 17. The currency pair later retreated slightly to trade at 1.3765, up 0.95 percent on the day.

Speaking at a meeting in New York, Dudley said: “We have tools that can provide additional stimulus at costs that do not appear to be prohibitive.

“Thus, I conclude that further action is likely to be warranted unless the economic outlook evolves in a way that makes me more confident that we will see better outcomes for both employment and inflation before too long.”

According to EUR USD analysis, EUR/USD was likely to touch support around Thursday’s low, 1.356, and encounter resistance around the high of March 17, 1.3818.

The dollar’s losses also came after a survey of purchasing managers showed that U.S. manufacturing activity slowed more than expected in September.

Elsewhere, the euro slid jumped the yen: EUR/JPY traded at 114.78, up 0.79 percent, according to intraday analysis.

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