Euro hits 5-mth high of $1.4269, runs into resistance

The euro slipped back from 11-month highs against the yen on Monday and a five-month peak against the dollar, as analysts said expectations for higher euro zone interest rates were becoming priced in.

 The Bank of Japan is likely to downgrade its economic assessment on Wednesday, while comments from a Federal Reserve official on Friday highlighted uncertainty over the need to tighten monetary policy in the United States.

 Markets expect the European Central Bank to raise interest rates by 25 basis points from a record low on Thursday, with a further two hikes factored in by year-end.

 The euro rose to $1.4269 against the dollar but stalled ahead of its November 2010 high, seen as resistance around $1.4281. It later eased to $1.4230 to trade around flat on the day.

 "I think the euro is close to putting in a top now as the monetary policy divergence story is almost fully priced," said Lee Hardman, currency strategist at BTM-UFJ. more