Euro Higher As Central Bank Meetings In Focus

The euro advanced against its most major counterparts in the European session on Tuesday, as investors looked to key central bank meetings this week for the next move on the monetary policy.

The Fed will begin its two-day meeting later in the day, with policy makers expected to announce a faster tapering of its asset purchase programme.

Investors await more clues about the possible timing of a first rate hike in 2022.

The European Central Bank will deliver its policy decision on Thursday, confirming an end to the pandemic emergency purchase program in March 2022.

Data from Eurostat showed that Eurozone industrial production recovered unexpectedly in October.

Industrial output grew 1.1 percent on a monthly basis, reversing a 0.2 percent fall in September. Economists had forecast the production to fall 0.5 percent in October.

The euro appreciated to a 4-day high of 0.8553 against the pound and a 5-day high of 128.52 against the yen, off its early low of 0.8529 and a 4-day low of 127.99, respectively. The euro is likely to find resistance around 0.87 against the pound and 130.00 against the yen.

The euro touched 8-day highs of 1.4506 against the loonie and 1.6755 against the kiwi, up from its prior lows of 1.4425 and 1.6676, respectively. Next key resistance for the euro is seen around 1.48 against the loonie and 1.70 against the kiwi.

The European currency edged higher to 1.1316 against the greenback, from a low of 1.1266 seen at 3 am ET. If the euro climbs further, 1.15 is likely seen as its next resistance level.

The euro rose back to 1.5896 against the aussie, not far from a weekly high of 1.5907 it touched in the Asian session. The euro is seen finding resistance around the 1.62 area.

In contrast, the euro was down against the franc, at an 8-day low of 1.0390. On the downside, 1.02 is likely seen as its next support level.

Looking ahead, U.S. PPI for November is scheduled for release in the New York session.