Monday, 22 Feb 2010

EUR/USD Rises and Falls with Debt Concerns in Europe

Following last Friday's late-session rise in the EUR, the 16-nation single currency fell today at the opening of the European markets. Concerns over Greece persist, and sovereign debt and spending issues are arising in other European Monetary Union countries as well, most notably in Portugal, Ireland, Italy, and Spain. Forex participants are witnessing the results of this turn of events with the simple rise in the EUR at week's end followed by today's downturn within the broader bearish channel which the EUR has been operating in for some time now.

The increase of the discount rate by the US Federal Reserve also helped hype up the US Dollar in today's afternoon trading sessions. As the anticipation for a rate hike were building, the USD was steadily rising. However, as the anticipation eases, so does the USD's momentum. Friday's downturn was a testament to this situation.