Forex - EUR/USD edges higher in quiet trade

The euro edged higher against the dollar on Monday but gains were limited in subdued trade as expectations that the Federal Reserve will start to slow its bond purchase program later this year continued to support the dollar.

EUR/USD hit 1.3170 during late Asian trade, the highest since July 17; the pair subsequently consolidated at 1.3147, edging up 0.07%.

The pair was likely to find support at 1.3088, Friday’s low and resistance at 1.3205, the high of July 11.

Demand for the dollar continued to be underpinned after Fed Chairman Ben Bernanke said last week that the central bank could scale back its asset purchases by the end of the year if the economy continues to improve, but added that there was no “preset course.”

Bernanke said the economic recovery was continuing at a moderate pace but reiterated that monetary policy will remain accommodative for the foreseeable future.

Elsewhere, the euro was lower against the yen, with EUR/JPY falling 0.44% to 131.60.

The yen was higher against the euro and the dollar on Monday after Japanese Prime Minister Shinzo Abe’s party claimed victory in weekend elections in the upper house, which will allow him to continue to push through a series of structural reforms aimed at spurring economic growth and fighting deflation.

USD/JPY was down 0.54% to 100.06, from 100.61 at the close on Friday.

The U.S. was to release private sector data on existing home sales later in the trading day.