2018.12.1905:25:00UTC+00Euro Higher On Italy Budget News

The euro climbed against its major counterparts in the early European session on Wednesday, after Italian government struck a technical agreement with the European Commission over its 2019 budget plan, ending a standoff between Rome and Brussels about deficit limit.

On Tuesday, Italy's Economy Ministry announced that an informal agreement had been made with the European Commission over its budget plan.

The deal is expected to be formalized on Wednesday at a meeting of EU commissioners in Brussels.

Prime Minister Giuseppe Conte said that "it is necessary to wait for the procedure to be completed in order to consider the negotiation definitively concluded." Conte will address the Italian parliament on Wednesday.

Data from the Federal Statistical Office showed that Germany's producer price inflation remained at its highest level in 19 months in November.

Producer prices rose 3.3 percent year-on-year in November, same as in October. Economists had expected a 3.1 percent increase. The pace of increase was the fastest since April 2017, when producer prices rose at the same rate. The currency rose against its major counterparts in the Asian session, with the exception of the pound.

The euro firmed to a 9-day high of 1.1405 against the greenback, from a low of 1.1359 hit at 5:00 pm ET. On the upside, 1.16 is likely seen as the next resistance for the euro.

The single currency advanced to a 2-day high of 128.20 against the yen, reversing from a low of 127.71 touched at 7:00 pm ET. The euro is poised to find resistance around the 130.00 mark.

Data from the Ministry of Finance showed that Japan recorded a merchandise trade deficit of 737.3 billion yen in November.

That missed forecasts for a deficit of 630.0 billion yen following the 450.1 billion yen shortfall in October.

The euro climbed to 1.1311 against the franc, its highest since December 6. Next key resistance for the euro is possibly seen around the 1.15 level.

Having dropped to 0.8982 against the pound at 5:15 pm ET, the euro reversed direction and strengthened to 0.9010. The next possible resistance for the euro is seen around the 0.91 level.

The euro appreciated to 1.5377 against the loonie, a level unseen since July 25. If the euro rises further, 1.55 is likely seen as its next resistance level.

The euro rose to 1.5853 against the aussie and 1.6626 against the kiwi, from its early lows of 1.5806 and 1.6569, respectively. The euro is seen finding resistance around 1.60 against the aussie and 1.68 against the kiwi.

Looking ahead, Canada CPI and U.S. existing home sales for November are set for release 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 its interest rate by a quarter-point to a range of 2.25 percent to 2.5 percent.