Monday, 12 Apr 2010

Analysts Warn Euro Gains May Be Temporary

The Euro recorded significant gains against its main currency pairs in trading on Monday. The single currency received a major boost after a group of European finance ministers came to an agreement regarding a Greek bailout package, a move which resulted in a return to risk taking among traders. While analysts are warning that the Euro's gains may only be temporary, investors have been quick to return to the fledgling currency.

EUR/USD reached as high as 1.3689 in early morning trading, a spike of almost 200 pips from last night. The pair is currently trading at around the 1.3585 level. Similarly, EUR/GBP shot up some 70 pips last night, reaching as high as 0.8846. The pair has since dropped slightly and is currently trading around the 0.8830 level.

Looking ahead to the rest of the day, a lack of significant news events will likely mean that the Euro will maintain its gains. That being said, a favorable U.S. budget report may lead to slight improvements for the greenback in afternoon and evening trading.