The euro and the pound firmed against their major counterparts in the European session on Wednesday, as European stocks rose on optimism about more economic stimulus measures in China to support the economy.
China’s Vice Premier Liu He said that Beijing would roll out policies favorable for markets and cautiously unveil policies having a contractionary effect.
Liu He added that monetary policy should take initiatives to support growth and pledged to keep capital markets stable.
The Vice Premier assured that the Chinese government would take forceful measures to prevent risks among property developers.
Investors await the Federal Reserve’s interest rate decision due later today, which is widely anticipated to deliver a 25 basis point rate hike amid high inflation.
Comments from Ukrainian President Volodymyr Zelenskiy that peace talks appeared to be more realistic lifted sentiment.
The euro edged up to 1.1015 against the greenback and 0.8429 against the pound, off its early lows of 1.0948 and 0.8389, respectively. Next key resistance for the euro is likely seen around 1.12 against the greenback and 0.86 against the pound.
Recovering from its early lows of 1.0299 against the franc and 129.50 against the yen, the euro climbed to more than a 2-week high of 1.0352 and a 3-week high of 130.33, respectively. The euro may find resistance around 1.06 against the franc and 132.00 against the yen, if it rallies again.
In contrast, the euro fell against the commodity currencies, touching 2-day lows of 1.3965 against the loonie and 1.5170 against the aussie. The euro may challenge support around 1.36 against the loonie and 1.49 against the aussie.
The euro was down at 1.6159 against the kiwi. The euro is seen finding support around the 1.58 level.
The pound rose to 1.3082 against the greenback and 1.2303 against the franc, up from its early lows of 1.3026 and 1.2258, respectively. The pound is likely to face resistance near 1.34 against the greenback and 1.25 against the franc.
The pound reached as high as 154.73 against the yen, which was its highest level since March 3. On the upside, 157.00 is likely seen as the next resistance level for the currency.
Looking ahead, Canada inflation data, U.S. retail sales and export and import prices, all for February, business inventories data for January and NAHB housing market index for March will be released in the New York session.
At 2:00 pm ET, the Fed announces its decision on interest rate. The central bank is expected to raise the target range for the federal funds rate by 25 basis points to 0.25 percent to 0.50 percent.