OTTAWA (dpa-AFX) - The euro strengthened against other major currencies in the European session on Monday, as European stocks traded higher led by gains in mining and retails sectors. The mood is largely cautious with investors awaiting the inauguration of U.S. President Donald Trump later in the day.
The focus is on Trump's speech that could provide some insight on potential tax cuts and tariffs.
Trading volume is quite thin due to a holiday in the U.S. to commemorate Martin Luther King Jr. Day.
Moreover, the traders anticipate that the European Central Bank (ECB) may lower interest rates in a number of upcoming policy sessions.
Data from Eurostat showed that Eurozone construction production grew at the fastest pace in nearly two years in November. Construction output rose 1.2 percent monthly after a 0.8 percent rebound in October. Further, the latest expansion marked the fastest since February 2023, when production had risen 1.5 percent.
On a yearly basis, industrial production rose 1.4 percent in November, following a flat change in October. It was also the first growth in ten months.
In the European trading today, the euro rose to nearly a 5-month high of 0.8474 against the pound and a 5-day high of 161.29 against the yen, from early lows of 0.8437 and 160.32, respectively. If the euro extends its uptrend, it is likely to find resistance around 0.85 against the pound and 166.00 against the yen.
Against the Swiss franc and the Canadian dollar, the euro advanced to near 2-week highs of 0.9423 and 1.4930 from early lows of 0.9401 and 1.4870, respectively. The euro may test resistance around 0.95 against the franc and 1.51 against the loonie.
The euro edged up to 1.0319 against the U.S. dollar, from an early low of 1.0279. The next possible upside target for the euro is seen around the 1.04 region.
Looking ahead, Bank of Canada Business Outlook Survey result is slated for release in the New York session.
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